The Indian markets after moving in a range lost their way completely and lost close to a percent in last session. Today, the start is likely to remain cautious on sluggish global cues, however some recovery too can be expected in latter trade and traders are likely to get some encouragement with global rating agency Moody’s Investors Service's latest report stating that low commodity prices and better FDI inflows have reduced India's vulnerability to external shocks which is 'credit positive' for India. It also said that India's external financing needs have diminished significantly over the last three years. Though, there will be cautiousness too with the Reserve Bank of India (RBI) in a report stating that India`s power reforms are likely to put pressure on state governments' budgets, potentially forcing them to cut spending needed to support economic growth. Meanwhile, India has offered its commitments on opening goods and services sectors in the Regional Comprehensive Economic Partnership (RCEP) negotiations, a a mega trade agreement which is being negotiated among 16 countries including 10 ASEAN members. The power stocks will be buzzing on reports that the Directorate of Revenue Intelligence (DRI) is probing over-valuation of coal imports by power companies.
The US markets closed lower in last session, offsetting the strength seen in the previous session. The weakness on Wall Street is partly due to a pullback by the price of crude oil and traders shrugged off a report from the Labor Department showing a bigger than expected drop in initial jobless claims. The Asian markets have made a weak start tailing the decline in the US markets and most of the indices in the region are witnessing cuts of over half a percent in early deals.
Back home, caution ahead of the quarterly results season, along with relentless selling by foreign funds, dragged the Indian equity markets lower and benchmarks deposed around a percentage point on Thursday. Sentiments were dampened since beginning of trade as traders remained on sidelines ahead of January-March earnings reports amid worries companies continued to suffer due to lacklustre economic growth and weak global demand. A sluggish quarter could hit sentiment further after the Reserve Bank of India failed to impress markets on Tuesday by cutting interest rates by 25 basis points, as some had hoped the central bank would act more boldly. Investors failed to get any sense of relief with industry body CII terming the GDP calculation methodology an ‘imprecise science’ and pegging the country's economic growth at around 8 per cent for the current fiscal, higher than the RBI's projection of 7.6 per cent. Markets participants also shrugged off ratings agency Moody's statement that India's rising foreign direct investment provides stable financing of its current account deficit and is a credit positive, implying that it would count positively towards a ratings upgrade at the time of the review. On the global front, Asian markets ended mostly in green on Thursday after Federal Reserve meeting minutes reaffirmed that US policy makers aren’t in a rush to raise interest rates, while European shares were slightly higher in early deals. Back home, after getting positive start, Indian benchmark indices immediately slipped into negative territory and extended their losses in late morning session, lacking any significant upside cues. Sentiments remained down-beat with report that foreign portfolio investors (FPIs) sold shares worth a net Rs 493.6 crore on April 06, 2016. However, the frontline indices tried to pare the early losses and crawled towards the neutral line in noon trade, but could not succeed as selling pressure accentuated in the late afternoon trades as investors took to across the board risk aversion. Finally, the BSE Sensex declined by 215.21 points or 0.86% to 24685.42, while the CNX Nifty dropped 67.90 points or 0.89% to 7,546.45.
