Markets likely to get a flat-to-soft start tailing global cues

The Indian markets slumped in last session, it was only the last hour recovery that helped the markets reduce their losses otherwise the sentiments got weighed down by the dismal IIP numbers. Today, the start is likely to be flat-to-mildly soft and the trade may remain range bound, traders will be eyeing some important result announcements to take cue, including that of SBI. The oil marketing companies (OMCs) are likely to be under pressure after their murky performance in Q1. Indian Oil Corporation has posted biggest loss by any listed company in the country after the government failed to compensate it for selling fuel at subsidiesd prices. The company posted record loss of Rs 22,451 crore in the April-June quarter as compared to Rs 3,719 crore loss in the same period a year ago. While, the other OMC, HPCL too has reported  a threefold rise in its net loss to Rs 9,249 crore in Q1 compared to losses of Rs 3,080 crore in the year ago period. The auto stocks too are likely to remain under pressure as the car sales in India slumped to its lowest in nine months in July at 1.43 lakh units. Meanwhile, with concern of slippages the government will reassess the fiscal deficit target after the mid-year review taking into account government expenditure and resources. The Finance Minister has earlier said that the government would soon come out with a fiscal plan, setting up a committee headed under Vijay Kelkar to suggest a plan.

The important result announcements scheduled today are, Apollo Hospital, Ashoka Buildcon, BPCL, Gammon Infra, India Infoline, Lanco Inds, Lovable Lingerie, Mcnally Bharat, Mangalore Chemicals, SBI, Shipping Corp, SMS Pharma, SREI Infra, Sun Pharma etc.

The US markets once gain made a mixed closing on Thursday despite better-than-expected jobless claims and trade data. Though, investors were still betting that central banks, including the Federal Reserve, will soon act in support of a stalling global economic recovery. The Asian markets have made a mixed start ahead of the Chinese export data which may show export growth slumped last month. Japanese market too was down by over half a percent on some weak earnings number and ahead of a report next week that is expected to show the country’s economy slowed.

Back home, key domestic benchmarks witnessed a turnaround in the trade on Thursday, snapping the session with modest losses. The frontline indices surrendered all of their intraday gains in the wake of government data showing a drop in industrial production for June as against expectations of a marginal increase. India’s annual industrial output growth measured by index of industrial production (IIP) disappointed the street, by registering a negative growth of 1.8% at 168.3 for the month of June 2012 against the growth figure of 2.4% in May, which later was revised a bit to 2.5%. The cumulative growth for the period April-June 2012-13 recorded de-growth of 0.1% over the corresponding period of the previous year. The indices of industrial production for the Mining, Manufacturing and Electricity sectors for the month of June 2012 stood at 124.3, 178.1 and 157.0 respectively, with the corresponding growth rates of 0.6%, -3.2% and 8.8% as compared to June 2011. The Sensex retreated more than 100 points from the session’s peak while the Nifty erased about 40 points from the day’s high. Selling pressure came in, after mobile carrier Bharti Airtel and drug maker Ranbaxy were routed after poor quarterly earnings. Meanwhile, shares of power equipment manufacturer BHEL and engineering & construction firm L&T too saw selling pressure after a sharp decline in capital goods production. The investors remain worried after some private research agencies slashed India’s FY13 GDP growth forecast to 5.5 percent for financial year 2012-13 from 6.5 percent earlier. Moreover, failed southwest monsoon also added to the long list of macro-economic problems. Data on credit off-take, deposit mobilization and overseas borrowings is pretty bleak and continuously dampening the market sentiments. Moreover, the sentiments were also dampened by retail stocks, which lowered as government’s claims of securing a consensus on opening up multi-brand retail to foreign direct investment (FDI) went flat, as only one state and 3 UTs up till now have given their written affirmation for it. Finally, the BSE Sensex lost 39.69 points or 0.23% to settle at 17,560.87, while the S&P CNX Nifty declined by 15.05 points or 0.28% to close at 5,322.95.