Market trends likely to remain weak on soft global cues

The Indian markets finally eked out some gain in last session after witnessing an extremely choppy trade. At one point of time it looked markets losing all traction to continue languishing in red. There was some last hour buying that helped the markets to recover. Today, the mood is likely to remain cautious as the global markets are not very supportive. Investors are now waiting for the RBI for its next policy action and the trade is likely to remain range bound. With no major economic announcements there will be only scrip specific actions to keep the markets buzzing. The Promoter of Kingfisher Airlines, Vijay Mallya, has sought more time from the DGCA to resolve the crisis and assured it of operating 100 domestic flights in the upcoming summer schedule. While, State Bank of India will permit home loan borrowers to shift to lower interest rates. Meanwhile, concerned over the steep rise in bad loans, the finance ministry has set up a committee to suggest sector-specific mechanisms to tackle the issue.  

The protest by gold and jewellery traders has entered the fourth day even as Finance Minister Pranab Mukherjee stick to his stand saying that its imports cause strain on balance of payment and impacts rupee's exchange rate. The government has also clarified that small artisans and goldsmiths who only manufacture jewellery for others on job-work need not register with central excise authorities. In the budget, the finance minister had altered the scope of 1% excise duty on gold jewellery to include both branded and unbranded jewellery within its scope.

The US markets closed lower on Tuesday on signs of a slowing Chinese economy, the mixed signs of housing data too weighed on the sentiments. The Commerce Department reported that February housing starts fell to a 698,000 annual pace from an upwardly revised 706,000 in the previous month. However, in a positive development, the retailer announced a higher-than-expected earnings forecast for the year. Most of the Asian markets have made a soft start and barring the Chinese and Taiwanese market all are trading lower, the Japanese market too was cautious ahead of the release of monthly economic assessment later.

Back home, after deposing over three and half a percentage points in last three sessions, Indian stock markets finally showed signs of consolidation on Tuesday as the benchmark equity indices halted the three session southward journey and negotiated a positive close with around a quarter percent gains. The markets showed some signs of recovery in mid morning trades after the brutal butchery in previous trading sessions owing to the disappointing federal budget, however, the psychological 5,300 (Nifty) and 17,400 (Sensex) levels proved to be stern resistance levels for the frontline indices as they failed to break those crucial points and dipped into the negative terrain. However, the key gauges found strong supports around the crucial levels on the downside and rebounded from those levels. Market participants were seen piling up positions largely across the board as they hunted for undervalued but fundamentally strong bargains after the recent sell-off. On the BSE sectoral space, the Consumer Durables counter outperformed all its peers in the space with around 2.5% gains. Investors also showed buying interest in the rate sanative Realty and Bankex counters which prevented the benchmarks from drifting into the red terrain while, market men continued to build positions in the defensive sectors too like FMCG and Healthcare sectors. Though, the Auto index remained the only chink in the armor and settled with 1.50% losses and capped the upside for the frontline indices. Auto stocks got bumped in the session with heavyweights like Tata Motors getting slaughtered by over 4% in amid worries about lower sales following a string of price hike announcements intended to factor in the higher excise taxes proposal in the 2012/13 Union Budget. Meanwhile, index heavyweight Reliance Industries, the country’s largest company showed some fervor for the first time in five days and climbed by 0.75% while another bellwether Bharat Heavy Electricals, the largest power-equipment maker, too ended with similar gains after a three-day, 12 percent drop.  Besides, Indian bourses failed to get any significant triggers from global peers as most Asian equity indices settled on a weak note with a negative bias. Finally, the BSE Sensex gained 42.81 points or 0.25% to settle at 17,316.18, while the S&P CNX Nifty rose by 17.80 points or 0.34% to close at 5,274.85.