Markets likely to get a gap-down start on weak global cues

The Indian markets rejoiced Obama’s win and surged in last session, there was some encouragement for the rate sensitives’ too after the RBI governor indicated that there could be rate cut as early as January next year. Today, the start is likely to be soft tailing feeble global cues.There will be some concern among the IT companies due to Obama’s anti-outsourcing stance, which has been an electoral winner for him. The power stocks are likely to keep buzzing, as Planning Commission deputy chairman Montek Singh Ahluwalia has stressed the need for speedy resolutions on the issue of price pooling for domestic and imported fuel coal and gas for the fuel-starved power plants in India. Also, there is some relief for the foreign investors, as easing norms for them the market regulator Sebi has allowed them to re-invest half of their investments in debt holdings to the next calendar year, starting from January 2014.

There will be lots of important result announcements to keep the markets ticking. Aditya Birla Nuvo, Alembic, Alstom T&D, Ashok Leyland, Cummins India, FIEM Inds, Godrej Inds, Goodyear India, Maharashtra Seamless, Manappuram Finance, MMTC, Natco Pharma, ONGC, Parsvnath Developers, Pfizer, Ranbaxy Lab, SAIL, Subex and Sun Pharma are among many to come up with their earnings today.

The US markets went through a sharp post election sell-off on Wednesday and Dow slipped below the 13000 mark for the first time since early August. There was concern among the investors after Fitch warning that if Obama don’t move quickly to avoid the fiscal cliff, it could lead to downgrade in 2013. The Asian markets have made a weak start and many of the indices are trading lower by over a percent in early trade. There was concern regarding China’s Communist Party meet to pick a new leader and as Japan’s machinery orders fell more than expected in September.

Back home, prolonging their northward journey for sixth straight day, domestic bourses garnered over half a percent on Wednesday with benchmarks snapping the session above their crucial 5,750 (Nifty) and 18,900 (Sensex) levels following the US election results. However, the frontline indices came off the day’s high due to profit booking in the last leg of trade. Nevertheless, sentiments at D-Street remained upbeat after Barack Obama won a second term as the President of the United States after defeating Republican challenger Mitt Romney in a closely fought battle. Overcoming what appeared to be a cliff-hanger, Obama finally managed to emerge winner after a convincing victory in the crucial state of California. Positive global cues too supported the domestic bourses as European stocks rallied in early deals on Wednesday as the re-election of US President Barack Obama fuelled expectation the Federal Reserve’s quantitative easing will continue. Back home, sentiments got some boost as realty pack gained over two and a half percent on hopes for a pickup in demand tied to the Diwali festival season in mid-November, a time considered auspicious in the country. Buying in rate sensitive -- banking -- too soothed the sentiments on report that the Reserve Bank of India may go for easing monetary policy as early as January. Appreciation in money market too aided the sentiments as Indian rupee advanced further by 36 paise to 54.07 against the US currency on selling of dollars by banks and exporters after the greenback weakened against major world currencies. Some amount of support also came in after interest rate sensitive auto stocks rose on expectation of rate cut from the central bank in the first quarter of 2013. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. Rally of over half a percent in software pack too bolstered investors’ confidence as sector welcomed re-appointment of US president Obama by staging favorable trend, even as concerns over outsourcing issue lingered. Finally, the BSE Sensex gained 85.03 points or 0.45% to settle at 18,902.41, while the S&P CNX Nifty rose by 35.70 points or 0.62% to end at 5,760.10.