Markets to make a cautious start, may move higher in later trade

The Indian markets made a flat closing on Friday, there was some concern that government may go for another roll back after making a steep hike in the petrol prices. Also, the rupee strengthened against the dollar after a long series of decline. Today, the start is likely to be cautious and the initial mood may remain somber lacking any major supportive cues. Though, the week is likely to remain volatile as it is the expiry week of the May F&O series. Also there will be lots of macro data pouring in, especially the GDP data. Rupee movement too will be keenly watched, as the Union Finance Minister Pranab Mukherjee has said that the Reserve Bank was taking steps to arrest the currency’s depreciation, caused because of various domestic and global factors. The telecom companies will keep buzzing as the Telecom Commission has asked the Telecom Regulatory Authority of India (TRAI) to analyse the impact of pricing on subscribers, operators and government revenues. The PSU oil marketing companies too will be in limelight as it has been reported that after a steep hike in petrol prices last week, the government is bracing for a hike in diesel too.

Also there will be lots of important result announcements. 3M India, Balrampur Chini, Bharat Forge, Bombay Dyeing, Britannia Inds, Coal India, Indian Hotels, Electrosteel Castings, Engineers India, Mcleod Russel, Oil India, Neyveli Lignite, NMDC and Trent are among the many to announce their numbers today.

The US markets declined again on Friday, though the economic news were good as the consumer confidence rose to its four year high but the European concern kept the traders cautious ahead of a long weekend. The Asian markets have made a mixed start; though the concern eased that Greece may exit the euro as some opinion polls showed that voters are behind parties supporting the European Union’s bailout. But the Chinese market was suffering the most and making the sentiments weak in the region on a report that profit growth slowed at China's industrial companies.

Back home, Friday’s session turned out to be a lackluster one for the Indian stock markets as the optimism that was evident in afternoon trades fizzled out completely by the end leading the benchmark equity indices to a flat closing around the neutral line. The session characterized of choppiness as after Thursday’s close to two percent rally, markets remained cautious and the key indices gyrated in a tight range for most part of the day. Investors lacked to conviction to open fresh positions amid a lot of uncertainties surrounding the domestic markets. The frontline gauges had drifted around the psychological 16,100 (Sensex) and 4,900 (Nifty) levels in morning trades following the early depreciation in rupee and few reports from influential brokerage houses highlighting that Indian economy may grow at a weaker than expected pace of around 6.3% amid the gloomy global and disappointing domestic setup. However, the key indices showed a sign of recovery, following the bounce back in rupee against the US dollar after Reserve Bank of India stepped up efforts to curb the beleaguered currency’s declining momentum. But, the key gauges failed to capitalize on the momentum as cautious investors took the opportunity to take profits off the table.  There were signs that the government was preparing to take bolder step of cutting subsidies on other fuels weighing on its budget deficit, but after a day of uproar over petrol price hike, the imminent move looked less likely, thereby keeping marketmen on the sidelines. On the BSE sectoral front, investors were seen piling positions in the Metal counter, which surged around a percent being the top gainer in the space. The Capital Goods pocket too traded with notable gains of around three fourth of a percent, helping the frontline indices pare losses. However, the defensive FMCG counter slipped lower in the session after bellwether ITC dropped over half a percent post announcing quarterly earnings. Corrections in some Oil & Gas majors like RIL and auto heavyweight like Maruti Suzuki capped the upside chances for the markets. Finally, the BSE Sensex lost 4.48 points or 0.03% to settle at 16,217.82, while the S&P CNX Nifty climbed by 1.00 points or 0.02% to close at 4,920.40.