Markets likely to get a soft start on feeble global cues

The Indian markets breaking their two days gaining streak declined on Friday, some political jitters and few weak earnings announcements weighed on the sentiments. Today, the start of the F&O expiry week is likely to be weak on feeble global cues and markets may get a gap down opening. However, the much hyped Presidential election is over, former finance minister Pranab Mukherjee won a highly politicised presidential election with a landslide margin and now the government is expected to go ahead with its reform measures. Though, there are reports that united opposition may jeopardise plan to push foreign direct investment (FDI) in multi-brand retail. Investors will also keep close eye on Reliance Industries after it reported 21 per cent drop in standalone net profit at Rs 4470 crore for the first quarter ended June 30. The telecom stocks too will keep buzzing as the EGoM on telecom, headed by home minister P Chidambaram, is scheduled to meet on Tuesday to discuss the issue of one-time spectrum fee along with final recommendations on minimum price for airwaves. In stock specific action Maruti Suzuki will be watched as the top management of the company will meet the Haryana government to discuss the future of the newly formed workers' union of the violence hit Manesar plant and it was shut down.

The US markets lost its traction on Friday on some weaker earnings and concern of Euro zone that emerged from Spain’s one province seeking fund to meet its refinancing needs. The Asian markets have made a weak start with most of the indices are trading lower by around a percent in early trade after a Chinese central bank adviser forecast an economic slowdown and also, as concern renewed that Greece may not meet its bailout targets.

Back home, snapping their two days winning streak, key domestic benchmarks ended the Friday’s trade with over half a percent cut as market participants chose to take some profits off the table amid sluggish global cues. Political jitters too pressurized the sentiments and bourses drifted lower on the buzz that  Nationalist Congress Party (NCP) chief Sharad Pawar and party member Praful Patel have sent their resignations to Prime Minister Manmohan Singh for not being given due credit for their work and seniority in the government. Though, the benchmarks traded in the tight range through the day as 5,200 and 17,150 proved to be a strong support level for Nifty and Sensex respectively. The sentiments also remained subdued after Public sector undertaking (PSU) oil marketing companies (OMCs) BPCL, HPCL and IOC edged lower as international crude oil prices surged for the seventh straight session on concern that Middle East tensions will pose potential supply disruptions. While the shares of sugar companies like Shree Renuka Sugars, Balrampur Chini Mills, Sakthi Sugar and Dhampur Sugar Mills tumbled in the trade, after Cabinet Committee on Economic Affairs (CCEA) approved the hike in the fair and remunerative price (FRP) of sugarcane by 17% to Rs 170 per quintal. The undertone remained cautious but tad optimistic as investors remained watchful about corporate results and awaited announcements on pending reforms. On the sectoral front rate sensitive banking space remained the biggest loser on concern that there may not be any further rate cuts by the Reserve bank of India (RBI) in its upcoming monetary policy review. In addition, the power companies came under pressure after slapping of 21% duty on imports of power equipment, expressing their disappointment at the decision, power companies have said that the move would raise equipment prices and raise electricity tariffs. But, the losses remained capped, up to certain extent as some amount of support was provided by auto and metal sector. Finally, the BSE Sensex lost 120.41 points or 0.70% to settle at 17,158.44, while the S&P CNX Nifty declined by 37.60 points or 0.72% to close at 5,205.10.