Markets to extend their somber mood with a soft start

The Indian markets in last session closed lower for the first time in past seven days amid feeble global set-up. The telecom stocks kept buzzing and moved higher after union cabinet approved one time spectrum fee. Today, the start is likely to be soft, as the global markets are not in good of their health and there is not much on domestic front too. There is likely to be some somberness in the markets, as FICCI’s latest quarterly survey on manufacturing has projected subdued growth in key sectors such as automotive, capital goods, metal and chemicals in the third quarter. The telecom stocks are likely to remain in limelight the Supreme Court has asked the government to immediately explain why it is restricting the sale of airwaves in the upcoming auctions, and not selling all spectrum vacated by the 122 licences whose permits were cancelled earlier this year. There will be some buzz in the banking stocks too, as the Finance Ministry hopes that the National Investment Board and new banking licences will soon see the light.

There will be lots of important result announcements too. ABG Shipyard, Amtek Auto, Anant Raj Inds, Apollo Hospital, Aurobindo Pharma, Bannari Amman Spg, BEML, Birla Corp, Bombay Rayon, BPCL, Coal India, Corporation Bank, Educomp Sol, Essar Oil, Eveready Inds, Fortis Healthcare, Glaxosmithkl Pharma, HDIL, HPCL, Indian Oil Corp, Jindal Steel etc announcing their numbers today.

The US markets extended their post election bear run for the second straight day on Thursday, though the jobless claims fell for the week in a sign the labor market’s slow recovery was gaining traction and US trade deficit narrowed in September but the traders remained concerned after Standard & Poor’s said it now sees a 15-percent chance that the economy will go over the “fiscal cliff” next year.  The Asian markets have made an all red start with some of the indices trading lower by over half a percent on European worries amid concern Greece’s bailout may be delayed. South Korea’s Kospi Index was the worst performer in early trade as the nation’s central bank kept its key interest rate unchanged.

Back home, snapping their six sessions gaining streak, Indian frontline indices ended in negative terrain as participants preferred to book some profit off the table amid subdued global cues. The domestic bourses made a gap-down start as investors moved to price-in the implications of President Barack Obama’s re-election in terms of the ‘fiscal cliff’ of tax hikes and spending cuts that will take place in January if no action is taken. However, barometer gauges pared substantial losses during the trade supported by positive opening in European markets. The psychological 18,800 (Sensex) and 5,700 (Nifty) bastions proved as strong support levels as the key indices despite repeated attempts refused to go below those levels. Feeble global cues too dampened the sentiments as US markets went through a sharp post election sell-off overnight and Dow slipped below the 13,000 mark for the first time since early August. Back home, selling in software pack also hammered investors’ confidence as Stocks like Infosys and HCL Tech declined due to Obama’s anti-outsourcing stance, which has been an electoral winner for him. Market bellwether Reliance Industries (RIL), with second-highest weightage on Sensex fell nearly half a percent, also led the index downfall. The central information commission (CIC), the apex body under the Right to Information (RTI) Act, 2005 has directed the Securities and Exchange Board of India (SEBI) to share the details of several entities that were involved in the Reliance Petroleum Insider trading case in 2007. The commission also directed the market regulator to give the details of file noting on the consent order. However, the losses remain capped after telecom stock such as Bharti Airtel, Idea Cellular and Reliance Communications edged higher in a weak market after the Cabinet approved one-time spectrum charges on all mobile phone companies, a move that will give the exchequer a minimum of Rs 30,927 crore. Rally in public sector oil marketing companies also limited the losses as stocks of HPCL and IOC surged 0.50-2.50 percent rose as crude oil prices dropped sharply. Finally, the BSE Sensex lost 56.15 points or 0.30% to settle at 18,846.26, while the S&P CNX Nifty declined by 21.35 points or 0.37% to end at 5,738.75.