Markets to get a flat-to-cautious start on sluggish global cues

The Indian markets after remaining listless throughout the day managed to eke out some gains in the final hours of trade backed by short covering in the last session. Auto sector remained star of the day with BSE auto index rising for a sixth straight session to a new all-time high on expectations that sales will improve after the RBI’s 50 basis points cut in repo rate. Today, the start of the market is likely to be quiet and the rangebound trade may continue for maximum part of the day lacking any major cue that could take the markets in either side. Banks will be in limelight with their announcement of lowering deposit and lending rates. Meanwhile, the other sector that could remain buzzing is Aviation, as the finance ministry on Thursday announced policy changes for the airline industry, allowing them to raise additional low-cost capital through external commercial borrowings. ECBs will help cash-strapped private carriers, like Kingfisher Airlines and other companies to raise working capital from abroad. However, the Ministry of Civil Aviation (MoCA) and airlines have sought clarity of external commercial borrowing norms for the sector from the finance ministry.

There will be lots of important result announcements, RIL may remain in limelight though it will be announcing its numbers after market hours. Other companies announcing their numbers include, Cairn India, Mastek, Merck, Honeywell Auto and State Bank of Bikaner and Jaipur etc.

The US markets extended their fall on Thursday on getting gloomy economy data coupled with concerns over European debt worries, as Spanish government bond yields rose after a disappointing debt auction. Though there were some good earnings announcement by Bank of America Corp, Morgan Stanley, and eBay Inc, but investors took cue from the above expectations weekly US claims for unemployment benefits numbers. The Asian markets have made a subdued start with all the major indices trading in red on getting weak economic reports from US and Group of 20 nations warning that Europe’s debt crisis still threatens global growth.

Indian equity markets managed to snap yet another session in the green territory with the frontline equity indices amassing over half a percent gains and extending the gaining streak for the fourth consecutive session. The frontline gauges showed side-ways movement since the start of trade and see-sawed around the psychological 5,300 (Nifty) and 17,400 (Sensex) levels through the morning trades. Sentiments remained subdued tracking the apathetic cues from Asian peers amid gloomy overnight developments. However, the key gauges succeeded in coming out of their range bound trajectory in afternoon trades and trended northwards, thanks to the rally in Automobile and Healthcare counters. Sentiments got a lift after European markets opened on an encouraging note ahead of Spanish debt auction as investors focused on reports that China would increase liquidity supply by employing measures like open market operations and reserve requirement ratio cuts in order to spur economic growth. On the domestic front, investors came across official data showing FDI into India increased by a whopping 74% to $2.21 billion in February as compared to the same month last year taking FDI for the period April- February 2011-12 to $24.8 billion, substantially higher than $19.42 billion in 2010-11, and $25.83 billion in 2009-10. However, despite India's exports exceeding government's target for the year through March, trade deficit widened to a record high following a surge in crude oil and gold imports. On the BSE sectoral space, the rate sensitive Automobile counter rallied higher than all its peers in the space with over two percent gains. While the defensive pockets like Healthcare and FMCG too witnessed hefty buying interests as they surged by around a percent each. But, the Capital Goods and Power sectors declined by over half a percent and remained top laggards as heavyweight BHEL got pounded by over three and half a percent amid reports that an US investment bank downgraded BHEL to Underweight. Meanwhile, there emerged mixed trends from the earnings front as on one hand cement major ACC got pummeled on reporting numbers that were below Street’s estimates while on the other, Indusind bank reported numbers that were in line with market expectations. Finally, the BSE Sensex gained 111.32 points or 0.64% to settle at 17,503.71, while the S&P CNX Nifty rose by 32.40 points or 0.61% to close at 5,332.40.