Markets to get a cautious start on mixed global cues

The Indian markets remained volatile and once again ended lower in the last session. CSO estimating India’s GDP growth in the current fiscal to a dismal 5% weighed on the sentiments. The economic  growth projection in the current fiscal year is weakest in a decade, even International Monetary Fund has stated that it will take India some tough decisions and several years before it can think of going back to a growth era of 8 per cent and more. Today, the start of the markets may remain cautious, though some buying can appear in the late trade after a series of decline. The PSU stocks will be in jubilant mood as the government offer for sale (OFS) of 9.5% in power sector major NTPC was subscribed 1.7 times. Through this issue, the government mobilized about Rs 11,400 crore and is expected to mobilize another Rs 5,000-7,000 crore through divestments in some more PSUs. Power sector too will be in action today, as the Power Minister will be meeting financial institutions to discuss issues impacting the growth of power sector.

There will be lots of result announcements too, to keep the markets buzzing. Advani Hotels, BEML, BGR Energy,  Bharat Forge, Birla Corp, Cadila Health, Canara Bank, Dhampur Sug Mills, GMR Infra, Hindalco Inds, Hinduja Venture, Mahindra & Mahindra, Panacea Biotek, Radico Khaitan,  Sun Pharma, Uttam Galva, VA Tech Wabag and Wyeth are among the many to announce their numbers today.

The US markets despite making a good recovery could not manage a positive close on Thursday. There was some selling pressure due to the uncertain financial situation in Europe and worries about whether lawmakers in Washington will be able to reach an agreement to avoid the automatic spending cuts due to go into effect at the end of the month. The Asian markets have made a mixed start and some of the indices are in red.Japanese market is down by over a percent after posting a back-to-back monthly current-account deficits for the first time in last 28 years. Also, the largest consumer-electronics maker Sony posted an eighth straight quarterly loss.

Back home, Indian equity indices continued their fall for yet another day on Thursday with both the indices snapping the session below their crucial 5,950 (Nifty) and 19,600 (Sensex) levels. Frontline gauges, after a negative start, regained some strength supported by buying in software and technology counters on the back of positive economic data in the US, the biggest outsourcing market for the Indian IT firms. But, all the efforts turned  futile after the Central Statistical Office (CSO) in the advance estimates shockingly pegged country’s Gross Domestic Product (GDP) growth rate for the current fiscal year to 5 per cent versus 6.2 per cent for 2011-12, lowest in a decade, on account of poor performance of manufacturing, agriculture and services sector. The estimate by CSO were drastically lower than what has been projected so far by the government and Reserve Bank of India (RBI). Cautiousness was also seen in the market as net direct tax collections during April-January this fiscal saw a slower pace of growth at 12.49 per cent as against the budgeted annual target of 15 per cent. Selling at home got intensified after European counters witnessed flat trade in the opening deals on Thursday on mixed earnings and concerns over economic and political developments in the euro zone. Back home, sentiment took a hit for the worst after some report suggested that country’s economic growth is likely to have eased further to around 4.8% in the quarter ending December, mainly as a result of deep cuts in government spending. Some pressure also came in from gold loans related stocks like Manappuram Finance and Muthoot Finance which declined in early trade as the working group set up by the Reserve Bank of India has suggested banks to increase their gold jewellery loans portfolio to curb large imports of gold. Sentiments also got dampened after upstream oil marketing companies declined after ONGC and Cairn India reported higher subsidy burden. The subsidy burden of ONGC, India’s biggest oil explorer, is set to cross Rs 50,000 crore this fiscal - the highest ever. Finally, the BSE Sensex lost 59.40 points or 0.30% to settle at 19580.32, while the S&P CNX Nifty declined by 20.40 points or 0.34% to end at 5,938.80.