The Indian markets extending their weakness lost close to a percent in last session, markets lost ground in second half amid rampant profit taking. Today, the start is likely to remain weak tailing the feeble global cues after two prominent members of the US Federal Reserve's Open Market Committee overnight said they intend to support an interest rate hike in June. On domestic front too doubts have cropped up on whether the rains would be as good as the market is expecting them to be. Meanwhile, the International Monetary Fund (IMF) Regional Economic Outlook for Asia and Pacific has said that structural reforms, including GST and in areas like land and labour, will be key to boost India's economic growth potential going forward. Though, IMF has retained its growth forecast for India this year at 7.5 percent. There will be a buzz in the telecom stocks, as a Parliamentary panel has said that government targets a revenue of Rs 64,580.92 crore in the current financial year from spectrum auction proceeds. The inter-ministerial panel Telecom Commission recently agreed to base prices of various frequency bands recommended by the regulator Trai for the auction to be held in July this year. The aviation stocks may continue to remain under pressure, as after ATF price hike, the government is set to hold talks with domestic airlines to cap airfares on short routes during natural calamities or unpredictable situations.
There will be some important result announcements too, to keep the markets buzzing. Jindal Steel, Hexaware, Adani Enterprises, NELCO, DHFL, V Guard Mangalam Cement and SKS Microfinance, among others, will disclose their numbers today.
The US markets ended lower in last session mainly on global growth concerns, after a disappointing manufacturing data from China and a surprise rate cut in Australia. The Asian markets have made mostly a lower start with some of the indices extending their longest losing streak since February, as anxiety over the health of the global economy unnerves investors. While, the Japanese market are closed Hong Kong market slumped to a three-week low.
Back home, Indian stocks markets turned a volte-face on Tuesday, as what started on a promising note ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted into the negative territory for the second consecutive session despite getting off to a gap-up opening. Marketmen remained optimist for half of the session with the report that India's infrastructure sectors clocking their highest growth in 16 months in March 2016, with the index for core industries climbing 6.4 per cent, against 5.7 per cent in February. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 435 crore on May 02, 2016. However, the sanguinity in local markets came under check as profit booking in metal, PSU and Oil & Gas counters exerted downside pressure on the frontline indices. Furthermore, investors turned jittery after International Monetary Fund (IMF) in its report indicated that China and Japan’s economies are expected to slow sharply over the next two years but Asian growth will remain strong as domestic demand takes up the slack from weak global trade. In its Regional Economic Outlook for Asia and the Pacific, the fund also warned of several external challenges, from weakness in advanced economies, weak global trade and increasingly volatile global financial markets. On the domestic front, sentiments were undermined by the repot that the growth in India's manufacturing sector slowed sharply in April as new business inflows were broadly unchanged during the month. On the global front, Asian marketed ended mixed on Tuesday, while European shares opened lower weighed down by selling pressure in mining and autos. Back home, after getting positive start, the local benchmark indices extended their gains and touched the day’s highs in mid morning trade, as investors turned optimistic after the combined output of eight crucial infrastructure sectors jumped to a 16-month high of 6.4% in March. However, sentiments turned pessimistic in afternoon session and the indices started declining, on account of profit booking in some specific sectors and weak start of the European markets. Finally, the BSE Sensex declined by 207.27 points or 0.81% to 25229.70, while the CNX Nifty dropped 58.90 points or 0.75% to 7,747.00.
