Markets likely to get a flat-to-positive start

The Indian markets in last session despite a good start could not hold up to their gains and slid in latter part of the day to close with loss of about half a percent, there was concern regarding the third quarter earnings season and the IIP numbers. Today, the start is likely to be flat-to-positive as the global cues are encouraging. Though there is likely to be cautiousness as Prime Minister Manmohan Singh has said that the high international price of oil was putting a big strain on the economy and effort should be made for reducing the transport sector’s dependence on oil. Also, the Commerce Minister Anand Sharma has said that the next meeting of the much-awaited joint working group (JWG) to rework the double taxation avoidance treaty between India and Mauritius will be held next month. There will be buzz in the steel sector as it has been reported that India’s biggest steel producers are in talks to buy coking coal at the lowest price since 2010.There will be some action in telecom sector too, as the mobile phone companies are set to drag the government to court after the telecom department issued notices to all operators this week directing them to pay a one-time fee on the existing airwaves they hold.

The US markets made some recovery on Wednesday after declining in last two sessions, encouraged by the start of better corporate earnings season following the release of quarterly results from Alcoa.The Asian markets have made mostly a positive start supported by the optimism from the US markets and as Japanese yen neared a more than two year-low after Prime Minister Shinzo Abe urged the central bank to double its inflation target.

Back home, Wednesday turned out to be a disappointing session of trade for the Indian stock markets, as market participants booked profit ahead of IIP numbers and third quarter earning slated to be released later this week. The frontline gauges, after managing to keep their head above water in first half, turned choppy in second half as sentiments got weighed down after the Society of Indian Automobile Manufacturers (SIAM) further downgraded the growth forecasted in the automobile industry for FY’13 to 0-2% from 1-3% projected in October this year, thereby reflecting acute slowdown being faced by the automobile manufacturers across all segments like commercial vehicles, two-wheelers as well as passenger cars. Meanwhile, domestic car sales fell by 12.51% to 141,083 units in December last year compared to 161,247 units in the same month in 2011. However, motorcycle sales last month went up by 4.83% to 844,113 units from 805,198 units in December, 2011. However, the sentiments to some extent were soothed in the dying hours of the trade, by the spurt of Railway stocks, which enticed traction after Union Railway Minister Pawan Kumar Bansal increased passenger fares by up to 20 percent. Beneficiaries of this development were Titagarh Wagon, Kalindee Rail Nirman and Texmaco Rail & Engineering. Though, the power stocks continued to exert pressure on the frontline indices. Stocks like, Adani Power, JSW Energy, NTPC, Power Grid Corp and Reliance Power declined after Finance Ministry raised concerns on the proposed discount on reserve price of coal mines to be offered to power companies. Also, investors shrugged off positive global set up with most of the Asian markets shutting shop in the green on Wednesday as investors resumed buying after taking profits from a sharp rally at the start of the year while warily bracing for corporate earnings season to kick off in full force. Back home, traders remained cautious ahead of IIP numbers which is slated to be released on January 11, 2013. However, the losses remain capped as some support came in from reports that the government is planning to hike the price of subsidized LPG cylinders by Rs 130 during January-March 2013. It also plans to hike diesel prices by Rs 1.5 a litre every month. All the PSU oil marketing companies viz. BPCL, HPCL and IOC traded higher during the session. Finally, the BSE Sensex lost 75.93 points or 0.38% to settle at 19,666.59, while the S&P CNX Nifty declined by 30.20 points or 0.50% to end at 5,971.50.