Markets likely to get a flat-to-soft start after a day of break

Indian markets made a flat closing in last session, though the trade remained choppy and traders cautious about the global development. Today, the start is likely to be flat as the markets will be looking again to global markets for cues. On the domestic front the coutiousness is likely to linger as India’s foreign direct investment (FDI) inflows into the services sector increased by a mere 5 per cent to $3.6 billion during the April-October period of this fiscal. The Pharma sector is likely to see some action as the Planning Commission has set a target for the pharmaceutical industry to reach $100 billion by 2020 and account for five per cent share of the global drug industry in the next five years. There will be buzz from the primary market, Credit Analysis and Research (CARE) will make its debut on the bourses today and street is expecting the stock to list at a large premium. The telecom stocks too are likely to be in limelight as the Department of Telecom may move the Supreme Court seeking an extension of the licence period.

Most of the global markets remained closed on Tuesday due to Christmas and so was the US markets, while they ended lower in a short trading session on Monday amid ongoing worries over the looming “fiscal cliff.” Most of the Asian markets have made a positive start and the Japanese market was leading the gainers, buoyed by the yen’s decline against the dollar and stimulus expectations from the new government that will assume office later in the day.

Back home, Monday’s session turned out to be a lackluster one for the Indian stock markets as the optimism that emerged in morning trade fizzled out completely by the end leading the benchmark equity indices to a flat closing just above the neutral line. Both the frontline indices gyrated in a tight range, throughout the day, keeping their head above water. Investors lacked conviction to open fresh positions and booked profits at higher levels ahead of the Christmas holiday and expiry of December derivative contracts on Thursday. The frontline gauges had drifted around the psychological 19,300 (Sensex) and 5,850 (Nifty) levels in morning trades following buying in key heavyweights along with broader indices. However, market-men turned cautious as the Plan panel warned that persistent policy logjam could pull down the annual average economic growth rate in the 12th Five Year Plan (2012-17) to 5-5.5 percent, from 7.9 percent recorded in the 11th Plan. Also, Chief Economic Advisor Raghuram Rajan has said that more painful decisions are needed to check deficit and diesel price hike and cut in subsidized LPG cylinders are only the first steps. Caution ahead of political stalemate in the US over a deal to avert the fiscal cliff too kept the bulls under check. Back home, major support came in from software and technology pack with both the counters garnering about a percent gain. Stocks like Infosys, Wipro, HCL Technologies, TCS and Oracle Financial Services Software firms were up on the back of weak rupee which helps boosts topline as major portion of their revenues come from exports to the US. FMCG stocks like Hindustan Unilever, Bajaj Corp, Colgate-Palmolive, Marico, Bliss GVS, Dabur India and Procter & Gamble too aided the momentum after the Centre said that as per reports received from different states, sowing of rabi or winter crops is progressing well in different parts of the country. Sentiments also got some support after shares of two-wheeler makers rose on expectations of pickup in sales during the ongoing wedding season. However, gains remained capped after Index heavyweight Reliance Industries ended in the red with a cut of 0.35 percent. Finally, the BSE Sensex gained 13.09 points or 0.07% to settle at 19255.09, while the S&P CNX Nifty rose by 8.05 points or 0.14% to end at 5,855.75. Indian markets remained closed on Tuesday on account of Christmas.