Markets to get a cautious but positive start

The Indian markets corrected after a choppy trade in last session and major indices despite a positive start and firm trade till mid session, lost their steam in last on some weak earnings announcement and suffered cut of over half a percent. Today, the start is likely to be cautious but slightly positive, there will be buzz in the market after capital market regulator issued the final regulations for investment advisers in India and said that that all entities engaged in advising on financial products will be required to get registered with it and segregate all such services from other activities such as distribution. There will be buzz in the PSU sector too, as the Finance Minister P Chidambaram has said that disinvestment target for FY'14 will not be less than Rs 30,000 crore. The banks too will be in action as a Reserve Bank of India panel suggested that banks could issue 30-year fixed rate home loans under the priority sector category (sub-Rs 25 lakh) to make loans more affordable.

There will lots of important result announcements too, to keep the markets buzzing. Deepak Fertilizers, Havells India, JSW Energy, Karnataka Bank, Novartis India, Rallis India, Reliance Communication and Sun TV Network are among many to announce their numbers today.

The US markets continued their bull run after a long weekend with Standard & Poor's 500 climbing to a fresh five-year closing high on Tuesday. There was sign that Republican leaders in the US House of Representatives aim on Wednesday to pass a nearly four-month extension of the US debt limit. The Asian markets have made a mixed start and some of the indices are trading lower in the region, weighed down by the strength in the yen, a day after the Bank of Japan opted to hold off on new monetary stimulus until next year.

Back home, Tuesday turned out to be a disappointing session of trade for the Indian stock markets, as frontline indices, snapping three consecutive days of rally, ended the session near their intraday low with a fall of over half a percent. Profit booking, at higher levels, mainly spoiled the mood with all the sectoral indices on the BSE ending in red. Though, markets traded in the green terrain during the first half as foreign institutional investors (FIIs) remained net buyers of Indian stocks on January 21, 2013 and bought shares worth a net Rs 842.95 crore. Some strength also came in from currency markets front after the rupee, gained sharply against the dollar after the government hiked import duty on gold to contain rising current account deficit. The rupee traded at 53.44, its highest level since October 2012. However, disappointing cues from European market took their toll on domestic sentiments in second half and dragged the frontline gauges below the psychological 6,050 (Nifty) and 20,000 (Sensex) levels. Investors mainly resorted to profit booking following the decline in European markets. Selling witnessed in banking counters also dampened the sentiments after the global ratings agency Moody’s in its Asia-Pacific Banking Outlook said that it has a negative outlook on the country’s banking system due to concerns over asset quality and the high interest rates. Listed jewellery companies too bore the brunt of investor ire following the import duty hike on gold to 6 percent from 4 percent. Companies such Gitanjali Gems, Rajesh Exports, Shree Ganesh Jewellery House, Titan Industries and P C Jewellers all edged lower during the day’s trade. The government increased the customs duty on gold and platinum by 200 basis points in a move aimed at curtailing imports of the two metals. Gold was one of the biggest contributors to the spiraling current account deficit which stood at 5.4 percent of the gross domestic product in the July-September quarter. However, losses remain capped to some extent as stocks of retail companies such as Pantaloon, Shopper’s Stop and Provogue India edged higher after Swedish major IKEA received Foreign Investment Promotion Board (FIPB) clearance for its Rs 10,500 crore investment in the country. Finally, the BSE Sensex lost 120.25 points or 0.60% to settle at 19,981.57, while the S&P CNX Nifty declined by 33.80 points or 0.56% to end at 6,048.50.