Markets likely to get a flat start, may recover in late trade

The Indian markets went through blood bath on Wednesday and bourses wilted along with rupee, which hit its all time low. Foreign as well as domestic investors fearing further deterioration in the local economic condition scrambled for safe havens. Today, the start is likely to be cautious to slightly green as some of the positive news from the globe may soothe the investors’ sentiments. Though investors will be eyeing the movement in rupee and if it weakens further, it may weigh down the equity market sentiments too.The rupee recorded the biggest drop since December to 54.49 per US dollar. There will be some buzz in the textile stocks as the Textiles Ministry has circulated the draft Cotton Trade (Development and Regulation) Bill, 2012, to state governments for consultation. Also, the telecom stocks are likely to be buzzing as it has been reported that the telecom regulator (TRAI) may be inclined to reconsider its recommendations on spectrum auction if the government asks it to do so. Trai's latest recommendations on spectrum auction propose to keep Rs 3,622 crore as reserve price per unit of 2G spectrum, more than 10 times the cost of the same permits in 2008.

Apart from this, there will be lots of important result announcements. Asahi India, Bajaj Auto, Bajaj Holdings, JP Infratech, JP Power, Satyam Computers, United Breweries and Wire & Wireless are among the many to announce their numbers today.

The US markets extended the losing streak on Wednesday, even some of the good economic news was unable to cool down the nerves and markets kept reeling under the concerns of the euro zone. Opinion polls in Greece showed that leftists opposed to the terms of the international bailout for the country may win a new election set for June 17. While, the FOMC minutes of the meeting expressed concern about the domestic economic recovery.  The Asian markets are showing some sign of recovery and barring few, most of them are trading in green on signs of global economic recovery.

Boisterous bears went on rampage in Wednesday’s trading session, thrashing stock markets in India by close to two percentage points, which led to sixth negative close for the benchmark indices in last seven trading sessions. Tuesday’s relief rally proved as the calm before the cyclone since investors lost more than double the ground they had covered in the previous session. After the gap down opening, the frontline equity gauges seldom showed signs of recovery as investors resorted to ruthless across the board risk aversion. Though the key gauges eventually found some support around the psychological 4,850 (Nifty) and 16,000 (Sensex) levels, the bulk of the damage was already done amid the somber cues from local money markets along with gloomy Euro-zone tidings. Sentiments got spooked in the session following the sharp over a percent depreciation in Indian currency, which went on to hit fresh all time lows of 54.46 against the US dollar on sustained dollar demand. Investors grew increasingly worried about the recent sharp fall in Indian currency despite repeated interventions by Reserve Bank of India as relentless risk aversion hit markets and highlighted the vulnerabilities of a country facing challenging fiscal and economic outlooks. Meanwhile, Finance Minister Pranab Mukherjee’s comments that India will issue some austerity measures to aid the fiscal consolidation process too failed to enthuse market participants. Moreover, cues from the global front too remained discouraging as market participants buckled under the worries that the Greek political leaders failed to reach an agreement to form a government, leading to the possibility of fresh elections in June. Across the board profit booking was evident with Metal index getting thrashed by over two and half a percent being the top laggard followed by the rate sensitive Automobile index which too settled with similar amount of losses. Though, no sectoral index managed to keep its head above the water, individual stocks like Sterlite and Bajaj Auto went home with some gains. Finally, the BSE Sensex plunged 298.16 points or 1.83% to settle at 16,030.09, while the S&P CNX Nifty shaved off 84.55 points or 1.71% to close at 4,858.25.