Markets likely to get a cautious start lacking any major cue

The Indian markets consolidated in last session and the trade remained rangebound throughout the day lacking any supportive cues, however the benchmarks managed to close in positive terrain. Today, the start is likely to be cautious and the consolidation mood may continue. The rate sensitives are likely to remain under pressure, as the Reserve Bank of India's governor, Duvvuri Subbarao, said that the probability of raising interest rates is small but did not rule it out due to upside risks to inflation.  The telecom companies too are likely to keep buzzing as the telecom regulator Trai has said there is no need for a separate exit policy and licence fee would continue to be non-refundable. The Department of Telecommunications had asked Telecom Regulatory Authority of India in October last year to recommend an exit policy for licencees who wish to exit telecom services under a licence.

There will be some important result announcements too, ACC, Ambuja Cement, Hindustan Zinc and Indusind Bank etc are the major companies to announce their numbers today.

The US markets gave up their some last session gains on Wednesday after the uninspiring earnings from IBM and Intel. There was nervousness on street ahead of another round of Spanish bond sales on Thursday. The Asian markets have made a mixed start with some indices marginally trading in red, awaiting results of French and Spanish debt. Spain’s non-performing loans as a proportion of total lending jumped to 8.16 percent in February, the highest level since 1994. Japanese shares have fallen even after the nation reported the fastest export growth in a year and a smaller-than-expected trade deficit.

Back home, Wednesday’s trading session turned out to be absolutely lackluster one for stock markets in India as the benchmark equity indices failed to sustain the gains they amassed in the early part of session. The frontline gauges remained range bound for most part of the session but drifted to lower levels in the last leg of trade to settle with trivial gains of two tenth of a percent. The benchmark gauges got off to a promising start a day after rallying over a percent on the back of RBI’s stunning 50 basis point repo rate cut. The better than expected quarterly earnings announcement from technology major HCL Tech too lifted overall market sentiments and also injected some life in IT and TECk counters, which were on the southward trajectory ever since bellwether Infosys’ weak quarterly result and a gloomy guidance. However, the psychological 17,500 (Sensex) and 5,350 (Nifty) levels proved as stern resistances as the key indices could not claw beyond those levels, instead drifted lower. The European markets played a spoilsport as they undermined sentiments by opening on a weak note after their biggest gain in more than four months in the previous session. Back home, market participants grew a bit worried over the quantum of rate cut by RBI fearing that it would reignite inflationary pressure. In addition, a gauge of consumer price inflation indicated that CPI surged to 9.4% in March as compared to 8.33% in February 2012. While market participants cashed in on the high beta Realty counter, which plunged about a percent on the back of realty major DLF’s over two percent plunge. The defensive FMCG index too slipped lower after bellwethers ITC plummeted. Besides, the rate sensitive Banking counter too surrendered all its gains by the end of trade to close marginally in red despite the over a percent rally in HDFC Bank after announcing encouraging fourth quarter earnings figures. Moreover, the broader markets showed resilience in the session but came off the day’s highs and settled with around half a percent gains outperforming their larger peers. Finally, the BSE Sensex gained 34.45 points or 0.20% to settle at 17,392.39, while the S&P CNX Nifty rose by 10.30 points or 0.19% to close at 5,300.00.