Markets to get a mild soft start of the new series and month

The Indian markets suffered cuts of about half a percent in the last session that restricted the series gain to three percent. Traders remained cautious for further rate cut by the RBI while, the government announced a downward revision in GDP growth to 6.2 per cent for fiscal year 2011-12 from the earlier provisional estimate of 6.5 per cent. Today, the start of the new series is likely to be cautious-to-soft as the global cues remain sluggish. On the domestic front the eight core sector rose 2.6% in December, lower than the 4.9% posted in the same month a year earlier, dragged down by a decline in coal, natural gas and fertiliser sectors. Oil India will be in focus today after Empowered Group of Ministers (EGOM) approved Oil India's divestment plan by selling a 10 per cent stake through Offer for sale (OFS). Oil India OFS base price is set at Rs 510, at a discount of a little over 5 per cent to its last day's closing price. The banking sector will be under pressure, as the Reserve Bank of India has proposed a steep rise in the provisioning requirement for loan restructuring  to five per cent from April 1, against 2.75 per cent at present.

Also, there will be lots of important earnings numbers to keep the markets buzzing. 3I Infotech, Adani Enterprises, BHEL, Corporation Bank, HCC, IDFC, Jet Air India, Marico, MCX, NELCO, Piramal Life, TVS Motor, Divis Lab, Indian Bank etc are among the many to announce their numbers today.

The US markets ended modestly lower on Thursday, the trade remained choppy throughout the day on mixed economic data. Initial jobless claims rose to 368,000 in the week ended January 26 th.On the other hand there was a substantial increase in personal income in December. The Asian markets have made a mixed start with most of the indices trading in red on the first day of the new month, after a gauge of China's manufacturing unexpectedly fell, though the Japanese market were trading up on some good earnings and a weaker yen.

Back home, January series futures and options expiry turned out to be an extremely disappointing affair for the Indian stock markets as the benchmarks capitulated to the unrelenting selling pressure amid high volatility. However, markets for the monthly F&O series accumulated gains of over 3 per cent. The hefty sell-off witnessed in last leg of trade dragged the key indices below the psychological 6,050 (Nifty) and 19,900 (Sensex) levels. Investors resorted to ruthless position squaring from the banking and oil & gas counters in the final hour of trade as sentiment got hurt after country’s FY12 GDP growth was revised to 6.2 per cent from 6.5 per cent. While, the government pegged FY12 gross domestic savings at 30.8 per cent, down from 34 per cent earlier. Sentiments were also hit coupled with looming concerns over global growth slowdown after weak economic data from US and Germany. Selling got intensified after European stock markets traded lower in the early deals after drop in German retail sales and a huge quarterly loss from Deutsche Bank, the country’s biggest lender, dashed hopes of a quick rebound. While, most of the Asian equity indices shut shop in the red. Back home, the risk appetite remained frail after the Reserve Bank of India in its third-quarter monetary policy review made further rate cuts conditional on government moves to control fiscal deficit. Selling in software and technology counters too dampened the sentiments as stocks like Infosys, TCS, Wipro and HCL Technologies all edged lower after rupee appreciated by 9 paise to 53.21 per dollar on mild selling of dollars from banks and exporters in view of persistent capital inflows from foreign funds.  However, losses remain capped as stocks of oil and gas sector like BPCL, IOC, Oil India, ONGC and Gail India all edged higher after a Cabinet’s panel for promoting investment by cutting red tape has asked the oil and defence ministries to resolve within a month their differences over allowing oil hunt in 47 blocks and seek fresh approval. Some strength was also provided by sugar sector as stocks like, Shree Renuka Sugar, Bajaj Hindustan, Balrampur Chini, EID Parry and Rana Sugar all rallied after the government increased the sugarcane price that mills are required to pay farmers by 23.5 per cent to Rs 210 per quintal for the year starting October 2013. Finally, the BSE Sensex lost 110.02 points or 0.55% to settle at 19,894.98, while the S&P CNX Nifty declined by 21.00 points or 0.35% to end at 6,034.75.