The Indian markets suffered severe slump in last session with major averages losing over two percent, posting their worst single day decline in last two months. Today, the start is likely to be in green and markets will recover from the massacre of last session with things stablising on global as well as domestic fronts. Rate sensitives like realty, consumer durables and auto may see some recovery, as home loans and other borrowings are set to get cheaper by at least half a percentage point in the coming months following Reserve Bank of India (RBI) governor Raghuram Rajan's decision to cut rates by 25 basis points to 6.50% .Traders are likely to get some encouragement with NITI Aayog member Bibek Debroy’s statement that India's growth could be around 7.8 percent in 2015-16, higher than the Finance Ministry's projection of 7.5 percent. There will be some buzz in the fertilizer stocks, as the government has notified the subsidy rates for phosphatic and potassic (P&K) fertilisers for the current fiscal, which are lower than the last year. The subsidy on nitrogen (N) is fixed at Rs 15.85 per kg, Rs 13.24 per kg for phosphorous (P), Rs 15.47 per kg potash (K) and Rs 2.04 per kg for sulphur (S). The PSU banking stocks too may see some action, as the Finance Minister Arun Jaitley has said that the government will push for consolidation of public sector banks once they are capitalised and strengthened.
The US markets despite some late hour recovery ended lower in last session, as the overseas markets moved mostly lower amid concerns about the global economy. Although, ISM said its non-manufacturing index climbed to 54.5 in March from 53.4 in February. The Asian markets have made mostly a positive start, as oil rebounded amid optimism a deal will be struck for major producers to freeze output. However, the Chinese market that has bucked the trend last session was marginally in red despite the Caixin Services PMI improving to 52.2 compared to 51.2 in last month.
Back home, Indian markets which looked controlling its breaths in early deals despite feeble global cues, went for a toss after the announcement of the Reserve Bank of India’s (RBI) first bi-monthly policy review for the fiscal, where it going much on expected lines reduced repo rate by 25 basis points from 6.75 per cent to 6.5 per cent, while narrowed the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps by reducing the MSF rate by 75 basis points and increasing the reverse repo rate by 25 basis points. The RBI kept the cash reserve ratio (CRR) unchanged at 4.0 per cent of net demand and time liabilities (NDTL) but reduced the minimum daily maintenance of the CRR from 95 per cent of the requirement to 90 per cent with effect from the fortnight beginning April 16, 2016. Stock markets, which had rallied on hopes that Rajan would announce a bigger rate cut, in a knee-jerk reaction fell sharply despite the RBI saying that its policy would remain 'accommodative', raising the prospect of another rate cut later this year. RBI also pledged to inject more long-term liquidity. Though, traders welcomed the move but the 25 bps cut seemed already been priced into markets and they were looking for some unexpected or rather a firm outlook for further rate cuts. Traders were unable to get any support with global rating agency Moody's Investors Service's statement that it is looking at India’s pace of reforms and pace of implementation. It added that the agency has a positive outlook on India’s BAA3 rating and that signals upward pressure on the rating over the next 12 to 18 months. On the global front, the Asian markets followed the footsteps of their US counterparts and ended mostly in red. The European markets too made a weak start on fading hopes about an output curb by oil producers. Back home, the Indian markets posted their worst day in nearly two months, as investors booked profits, with bears in full control. Sensex not only slipped below its 100 days moving average but also lost its crucial psychological mark of 25000. Nifty too barely managed to protect its 7600 level in the brutal slump of the day. Finally, the BSE Sensex slumped by 516.06 points or 2.03% to 24883.59, while the CNX Nifty plunged by 155.60 points or 2.01% to 7603.20.
