Markets to get a somber start of the new fiscal, tailing weak global cues

01 Apr 2016 Evaluate

The Indian markets trading choppy ended flat in last session, with the March series expiring with over 10 percent gains. Rollovers to the April series were strong compared with that in last month. Today, the start of the new series and fiscal is likely to be in red, tailing the weakness in the other global markets. However, there will be some support with reverse of a three-month decline in industrial production, eight core sector industries surged to a 15-month high of 5.7 per cent in February, almost double the 2.9 per cent of January. Traders will also be getting some comfort with Finance Minister Arun Jaitley pegging India's GDP growth rate at 7.6 percent for the fiscal 2015-16 and expressing hope for better numbers next year. There will be some buzz in the oil & gas sector, as the government has announced a ceiling price of $6.61/mBtu on gross calorific value basis for domestic natural gas produced from difficult areas for six months starting April 1. ONGC and Reliance Industries have discoveries in such areas and hence, stand to benefit from the new policy, though it may not come immediately. The auto sector too will be in action with announcement of their monthly sales numbers.

The US markets made a mixed closing in last session, as traders seemed reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday. The Asian markets have made a weak start led by the Japanese market which is down by over two percent as the yen resumed gain and the Japanese 'tankan' manufacturing confidence index came in worse than expected. However, there were some gains in metals after a gauge of Chinese manufacturing expanded for the first time since July.

Back home, Indian equity benchmarks ended the last day of the financial year on a cautious note, after a volatile session due to the expiry of monthly derivative contracts on Thursday, but indexes still posted their best monthly gain in more than four years boosted by big overseas inflows. According to data from National Securities Depository and Securities and Exchange Board of India, FIIs have put in Rs 21,327 crore ($3.18 billion) so far in the Indian market during the current month (till March 29). Rate sensitive sectors - banks, auto and realty - were among the top gainers in March that rallied a hope that the RBI might cut key rates in the next Monetary Policy review on April 5. Sentiments got some support with the Finance Minister Arun Jaitley’s statement that the country’s GDP growth rate of 7.6% for the fiscal 2015-16, is ‘much less’ than its potential and expressed hope for better numbers next year. Jaitley also said that India earlier had a bad reputation of not being the best place to do business, but the governments at the Centre and states have made considerable headway in reforming the system. Appreciation in the rupee against the dollar too aided sentiments. On the global front, Asia markets ended mixed on Thursday, while European stocks declined in early trade. Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade, a session after the awe-inspiring close to two percent rally. But the frontline indices slowly but steadily started gathering steam and surged by around half a percent by late morning trades. Finally, the BSE Sensex gained 3.28 points or 0.01% to 25341.86, while the CNX Nifty rallied 3.20 points or 0.04% to 7,738.40.

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Markets to get a somber start of the new fiscal, tailing weak global cues

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