The Indian markets made a flat closing with positive bias in last session with some buying emerging in the last leg of trade. Today, the start of the new week is likely to be soft, tailing the weakness in some regional peers. Traders will be concerned with a report that exports of 17 sectors, over half of the 30 sectors including petroleum products, textiles, man-made yarn and fabrics, engineering and leather, closely monitored by the Commerce Ministry were in the negative zone in March due to a fall in global commodity prices amid tepid demand. Meanwhile, Commerce Minister Nirmala Sitharaman has said that India has a clear picture of how to move on the trade front, and is certainly not aimless when it comes to trade negotiations. Traders will also be worried about a Care Ratings report on Employment in the Corporate Sector that notwithstanding the Indian economy’s steady growth, sectors such as telecom, engineering and electronics have witnessed a decline in employment rate over the last four year. There will be some buzz in the logistics stocks, as an ASSOCHAM-Resurgent India joint study has said that India can save up to $ 50 billion if logistics costs are brought down from 14 percent to nine per cent of country`s gross domestic product (GDP) thereby making domestic goods more competitive in global markets.
There will be lots of earnings related reactions and important result announcements to keep the markets buzzing.HDFC, L&T Finance Holdings, TBZ, Mafatlal Industries and Parry's Sugars etc will come with their numbers today.
The US markets ended lower in last session, though there was good recovery from the day’s low but the markets could not manage a green close, extending the sell-off of the previous session, mainly because of some disappointing earnings numbers. The Asian markets have made a weak start on concern over the global economy, with Japanese Nikkei plunging over 3 percent as yen surged to its strongest level in more than 18 months, while some other major markets remained closed for a holiday.
Back home, Indian benchmark indices snapped a volatile trading session on a flat note as gains in energy stocks following a recovery in crude oil prices, were offset by disappointing quarterly results from ICICI Bank. The country’s biggest private sector lender posted a steep fall in its net profit for the quarter that ended in March 2016 at Rs 702 crore. Sentiments got some support with UN report for the Asia-Pacific that indicate Indian economy is projected to expand by 7.6 percent in 2016-17 and accelerate to 7.8 percent in 2017-18, mainly on the back of domestic consumption demand aided by steady employment and a relatively low inflation. Besides, the rupee recovered by 7 paise to 66.45 against the US dollar on fresh selling of the American currency by exporters. Some support also came with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 120.63 crore on April 28, 2016. However, investors remained cautious with the report that the country's current account deficit is likely to widen modestly to $25 billion in the current fiscal from $20 billion last year on rising demand for gold and sluggishness in exports. Moreover, the government’s statement that implementation of new pay scales recommended by the 7th Pay Commission is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 percent of GDP, on the exchequer in 2016-17, also weigh on sentiment. The burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Meanwhile, Jewellery stocks came under pressure after the report that the government ruled out rollback of 1 percent excise duty on gold jewellery levied in the budget, calling it a tax on a luxury item. Stocks related to sugar space declined for another day after the government decided to allow states to impose and enforce stock limits to check the price rise in sugar. Furthermore, most of the realty stocks edged lower on profit booking after a rally in the last session. On the global front, Asian markets declined, extending their weekly loss, European stocks too fell in early trade. Back home, the local benchmark got off to a somber opening, extending the downtrend for the second straight session as pessimistic sentiments prevailed across Asian markets after Wall Street slid. The key gauges showed some strength in early trade, but profit booking at higher levels dragged the key indices lower. Finally, the BSE Sensex gained 3.52 points or 0.01% to 25606.62, while the CNX Nifty rose 2.55 points or 0.03% to 7,849.80.
