Markets likely to get a soft start tailing the regional counterparts

The Indian markets showed a lackluster range bound trade in last session and the benchmark indices despite breaching their crucial upper levels, just managed to make a flat closing. Today, the start is likely to be soft, as the regional cues are feeble and the markets may lose some strength with volatility likely to creep in later hours of the penultimate day of F&O expiry. Even government’s effort to prop up rupee by easing norms for foreign retail investors to buy directly into Indian shares and bonds, may not bear fruit today. The commodities stocks are likely to remain under pressure, tailing the decline in their global counterparts after the denial of China for going for a big stimulus. Meanwhile, the textile sector stocks are likely to get some boost with government asking banks to restructure loans worth Rs 35,000 crore for the textile sector. Though, with this biggest loan recast programme, only  a quarter of the loans will be restructured  as banks as on whole have an exposure of Rs 1.56 lakh crore to the sector.

It’s a big earning day and there will be lots of important numbers to keep the markets buzzing. Aban Offshore, Anant Raj Inds, Colgate Palmolive, Jaiprakash Associates, DLF, Financial Technologies, Gail India, Godrej Inds, HDIL, Jindal Saw, Mahindra & Mahindra, Parsvnath Developers, PTC India, Rajesh Exports and Spicejet are among the many to announce their numbers today.

The US markets surged on Tuesday on getting positive news from the Euro zone, renewed hopes that Greece will stay in the euro zone helped the major indices to move higher by over a percent. The Asian markets have made a mixed start with majority of the indices giving up their last session gains and trading with big loss as China damped speculation of large-scale economic stimulus and the euro fell to a two-year low as Spanish borrowing costs rose after Egan-Jones Ratings cut Spain's credit level for the third time in less than a month.

Back home, after showcasing a strong performance in the last session, stock markets in India once again slipped in to consolidation mode on Tuesday with the benchmark equity indices cornering trivial gains by the end. 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 Monday’s rally, markets remained cautious and the key indices gyrated in a tight range for most part of the day. Investors lacked conviction to open fresh positions ahead of May series futures and options contract expiry and March quarter GDP data, due later in the week. The frontline gauges sailed well beyond the psychological 16,500 (Sensex) and 5,000 (Nifty) levels in early afternoon trades but faced stern resistance around those levels. Just when it looked like the domestic markets would snap yet another session with notable gains, volatility crept in and investors started booking profits. Indian markets literally appeared to be swaying to the tune of European markets in the second half. The firm start for European bourses pulled local markets to the day’s high but the markets there could not hold on to the gains and plunged lower, thereby dragging the domestic benchmarks around the previous closing levels. Meanwhile, the markets even went onto underperform against the regional peers as most Asian markets settled in the green territory with the bourses in China and South Korea surging over a percent. The upside for local markets was also capped by the resurfacing concerns from money market where the rupee traded on weak note against the US dollar, snapping three sessions of gains on the back of weakness in euro and dollar demand from oil companies and corporate. The rate sensitive Automobile pocket, which got beaten down in the previous session on reports of government mulling over hiking excise duty on diesel cars, witnessed some short covering. However, the defensive FMCG counter bore the maximum brunt of selling pressure and plunged about a percent, while Consumer Durables and Healthcare sectors too slipped slower by the end. Finally, the BSE Sensex gained 21.74 points or 0.13% to settle at 16,438.58, while the S&P CNX Nifty rose by 4.45 points or 0.09% to close at 4,990.10.