Markets to make a soft start tailing weak regional cues

The Indian markets posted loss of another around half a percent in the very beginning of the week, with Nifty slipping below crucial 9200 mark, as rising geopolitical tensions in the Middle East and the Korean peninsula weighed down the sentiment. Today, the start is likely to be soft tailing the weak regional cues and rising geopolitical tensions. Meanwhile, the government has said there is no proposal under its consideration to review the foreign direct investment (FDI) policy in the multi-brand retail sector. There will be some buzz in the oil & gas stocks on report that India’s fuel demand fell 0.6 percent in March compared with the same month last year. Sales of petrol, were 2.9 percent higher from a year earlier at 2.11 million tonnes. Cooking gas sales increased 1.9 percent to 1.89 million tonnes, while naphtha sales surged 1.8 percent to 1.15 million tones. However, sales of bitumen, used for making roads, were 12.2 percent lower. The tobacco and cigarette stocks too will show some reaction to reports that health ministry in its bid to lower consumption of tobacco products, has sought to tax all such products, including bidis, at 28% as well as impose higher cess under the new GST regime.

The US markets managed a modestly positive close in last session despite a lackluster day of trade. There was nothing much on economic front and traders were eyeing reports on retail sales, producer and consumer prices, and import and export prices later this week. The Asian markets have made mostly a soft start and many of the indices are down by around half a percent, as Chinese shares slumped and the yen weighed on Japanese equities.

Back home, Indian equity markets have prolonged the lull for third straight day and finished the session on a dull note, marginally below the neutral line as investors refrained from making big bets ahead of March quarter earnings, which begins later this week. Besides, tensions around the Middle East and the Korean peninsula send jitters across emerging markets with stocks extending losses for a third day and currencies weakening against the dollar. Indian rupee dropped by 32 paise to 64.60 against the dollar due to growing safe haven appeal for the American currency owing to higher chances of a tighter US monetary policy. Investors also remained cautious ahead of key economic numbers - industrial production (IIP) data for February and consumer inflation for March due to be released on Wednesday. The downside risk for the frontline indices was limited by reports that foreign investors have pumped in a staggering $2.45 billion in capital markets in the last four trading sessions. This comes following a record net inflow of Rs 56,944 crore ($8.7 billion) last month, mainly on expectations that BJP's victory in recently held assembly polls would lead to faster reforms. Some support also came with CII Business Confidence Index released during the weekend, which said that India Inc.'s perceptions about the state of the economy slid in the last quarter of 2016-17, yet industry's confidence levels about the future have peaked to their highest level in more than six years. Meanwhile, Liquor stocks such as United Spirits, Radico Khaitan, Associated Alcohols & Breweries, Tilaknagar Industries and Globus Spirits came under selling pressure after Madhya Pradesh Chief Minister Shivraj Singh Chouhan announced that all liquor shops would be closed across the state in a phased manner. Finally, the BSE Sensex decreased 130.87 points or 0.44% to 29575.74, while the CNX Nifty was down by 16.85 points or 0.18% to 9,181.45.