Markets likely to make a cautious start of the day

The Indian markets showed some courage and managed to close marginally in green on Tuesday, there was some buying in beaten down bluechips and few good earnings announcements that helped the markets to snap the session in green. Today, the start is likely to be a bit soft, as other global markets too are trading in red. Traders will be watching government actions after the swearing in of Pranab Mukherjee as India’s 13th President later in the day. There is some hint of diesel price hike as the petroleum ministry is planning to move the Cabinet Committee on Economic Affairs for a hike in diesel and domestic LPG cylinder prices. Traders will also be eyeing the movement of rupee which has again gone on a southward journey, breaching the 56-mark in last session. The NSE’s decision to exclude 51 stocks, including Essar Oil, MTNL and Oil India, from its derivative segment with effect from Friday following Sebi’s new guidelines, too will keep the markets buzzing. Telecom stocks are likely to show some reaction too, as Decision on spectrum fee by the EGoM headed by Home Minister P Chidambaram has been deferred.

There will be lots of important result announcements too, Biocon, GTL Infra, HCL Tech, India Glycols, MRF, NIIT, Raymond, Power Grid Corp etc will announce their numbers today.

The US markets suffered sharp cuts on Tuesday, Dow extended its triple digit decline for the third straight session amid concerns about the ongoing debt crisis in Europe and a round of disappointing profit outlooks, though there was some recovery in last minutes on a report that Fed was nearing to announce a stimulus. The Asian markets have made another weak start with most the indices trading lower by about half-to-one percent. Japanese market was down by over a percent as the yen rose against all its major peers on concern Greece won’t meet its debt-reduction targets.

Back home, it was completely a range-bound day of trade where domestic benchmarks consolidated near their crucial 5,100 (Nifty) and 16,900 (Sensex) levels after witnessing the biggest drop in two months in previous session. Local bourses got a good start but were unable to capitalize on it and ended with marginal gains. Though, the positive sentiment was triggered by petrol price hike of 70 paise per litre by some state run fuel retailers, which sparked expectation that diesel price hike too would be around the corner. Sentiments got some respite from political jitters after  Sharad Pawar-led Nationalist Congress Party (NCP) deferred its decision on whether to withdraw from the Manmohan Singh government by a couple of days. Union Heavy Industries minister and NCP leader Praful Patel said it will remain an integral part of UPA until 2014. He also stressed that NCP was not a post-poll partner, but a core constituent of the UPA. On the sectoral front FMCG remained the top gainer led by Hindustan Unilever (HUL), which hit its new 52-week high after registering a surge of 112.26% in its net profit at Rs 1331.19 crore for the Q1FY13 while, the total income of the company has increased by 16.99% to Rs 6597.38 crore for quarter under review. In addition, the sector also got support from Dabur and Colgate-Palmolive, which also registered gains of 30.54% and 16.90% in its net profit for Q1FY13. However, Wipro pressurized the IT pack after reporting lower than expected Q1 numbers and tumbled over 3%. The company has registered a fall of 5.03% in its net profit at Rs 1158.00 crore for Q1FY13 though; the total income of the company has increased by 18.69% at Rs 892.75 crore the quarter under review. Sentiments also got support from Cement space as stocks like Ambuja Cements, Ultratech Cements and ACC edged higher by 0.50-1.50% on the buzz of increase in cement prices. Moreover, Sugar space too aided the sentiments as stocks like, Triveni Engineering, Simbhaoli Sugars, Rana Sugar, Balrampur Chini Mills and Shree Renuka Sugar, which edged higher after domestic sugar futures moved higher. The BSE Sensex gained 40.73 points or 0.24% to settle at 16,918.08, while the S&P CNX Nifty rose by 10.25 points or 0.20 to close at 5,128.20.