Markets likely to start weak as global leads remain somber

The Indian markets closed with marginal gains in last session as there was not much cue to take the markets higher. The mixed global and domestic cues kept the indices movement range bound. Today, the markets are likely to start on a weak note, tracking the pessimistic cues that the global markets are exhibiting. The Auto stocks are likely to be in focus after SIAM data showed car sales in India grew by just 2.2% in 2011-12, the slowest pace in two years but said it expects the growth to be around 10-12% in the ongoing fiscal on better macro economic prospects. Meanwhile, despite battling a huge fiscal deficit, India has pitched for higher ratings from rating agency S&P’s based on its expectation of a revival in economic growth, better revenue and fiscal consolidation in 2012-13. Besides, capital market regulator SEBI has pulled up the National Stock Exchange for alleged irregularities by brokers and asked it to be more cautious and perceptive in discharge of its regulatory duties.

Moreover, the PSU oil marketing companies may see some buying in the session on the back of sharp decline in international crude oil prices which plummeted to a near 8-week low. Apart from this there will be lots of scrip specific actions to keep the markets buzzing.

The US markets registered their biggest one day fall in the year 2012 on Tuesday as they got battered for the fifth successive session amid concerns about European debt crisis resurfacing after borrowing costs for Euro-zone nations rose ahead of the start of first quarter earnings season. The Asian markets have mostly made a negative start and barring one-two indices most are trading with losses of around half to one percent.

Back home, it turned out to be a lackadaisical performance from the Indian equity markets on Tuesday as the benchmark indices somehow managed to negotiate a close in positive territory, rising marginally above the previous closing levels. The frontline gauges showed signs of consolidation and settled just shy of the psychological 17,250 (Sensex) and 5,250 (Nifty) levels a session after suffering severe across the board pounding. Despite the trivial gains, the key indices not only halted the two session downtrend but also outperformed their European counterparts which traded with large cuts. Markets remained on the edge as uncertainty loomed over the GAAR provisions amid reports that FIIs have asked the government to remove the applicability of GAAR to foreign portfolio investment. Meanwhile, amid a weakening macroeconomic backdrop, the Finance Ministry is likely to meet ratings agency S&P to defend India's fiscal deficit roadmap and will explain their concerns over the ratings outlook. However, the Petroleum and Natural Gas Regulatory Board (PNGRB) decision to fix the new tariff and compression charges for the gas companies did not seem to have gone down well with investors who severely bludgeoned Indraprastha Gas stocks by over thirty percent while other gas stocks like GAIL India, Gujrat Gas, Petronet LNG too got tormented in the session. Besides, foods stocks like LT Foods, Kohinoor Foods and KRBL spurted in the session after almost a decade, Indian basmati rice exporters have now started direct shipments to Iran. The downside for the frontline indices was capped by the gains in defensive FMCG counter while the rate sensitive Automobile, Banking and Real Estate pockets too chipped in with their contribution to keep the bourses afloat in the green. But, investors were seen squaring off hefty positions from the Capital Goods counter while IT and Metal pockets too bore the brunt of selling pressure. On the global front, sentiments in the Asian region remained mixed as on one hand Chinese markets climbed after reporting an unexpected trade surplus for March while the Japanese bourses dipped into the red after Bank of Japan kept monetary policy steady. The European peers got off to a somber open opening as major equity indices coming from an extended weekend traded with large cuts of over a percent as concerns spurred by weak US jobs data about the world's largest economy overshadowed positive trade numbers from Germany and China. Finally, the BSE Sensex gained 21.70 points or 0.13% to settle at 17,243.84, while the S&P CNX Nifty rose by 9.20 points or 0.18% to close at 5,243.60.