Markets likely to make a cautious start of the new week

The Indian markets continued their bearish run in the last session, weighed down by the economic concern and some weak earnings numbers. Today, the start is likely to be cautious lacking any regional cues. Traders will be eyeing the IIP and inflation numbers scheduled to be announced later in the week for more cues. There will be some support to the markets, as the Finance minister P Chidambaram has indicated that he would bring in major changes in the Budget to boost equity culture among retail investors and address concerns that this group was preferring financial assets over physical ones, mainly gold.  Traders will also be eyeing the international crude oil prices, which is now ruling at  nine months high mainly because of strong demand from China and lower supplies from the Organization of the Petroleum Exporting Countries. PSU banking stocks will be in limelight as the government plans to allocate around Rs 20,000 crore for bank capitalisation in the next fiscal to help state-run banks meet the capital adequacy requirements under the Basel III norms.  Also, there will be buzz in the whole trading fraternity as the MCX Stock Exchange (MCXSX) will begin trading in equities and equity derivatives from today.

There will be lots of result announcements too, to keep the markets buzzing. AIA Engineering, Asahi India, Britannia Inds, Electrosteel Steels, Hanung Toys, Hexaware Tech,  Indian Hotels, Jaiprakash Associates, JSW Ispat,  JP Infratech, ONGC, Punj Lloyd, Tata Power, Visa Steel, Voltas are among the majors to announce their numbers.

The US markets ended higher on Friday after US trade deficit narrowed to its narrowest in three years and Nasdaq closed at its best level in last three years. While, most of the Asian markets are closed today, rest of the trading ones have made a positive start. Meanwhile, China has become the world's biggest trading nation last year as measured by the sum of exports and imports of goods, surpassing the US.

Back home, south-bound journey continued for yet another day on D-street on last trading day of the week with frontline indices hitting its 2013’s low as investors continued to remain concerned over economy growth after Central Statistical Office (CSO) on Feb 7th 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. Sensex, after trading near its neutral lines for most part of the day’s trade, lost its ground ending below its crucial 19,500 mark while, Nifty managed to retain its crucial 5,900 mark but ended with a cut of over half a percent as investors resorted to profit booking in late trade on concerns that PSU disinvestment and reduction of promoter stake to meet the Securities & Exchange Board of India (SEBI) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. Traders shrugged off supportive global cues as European counters traded with traction in the early trade on Friday ahead of European Central Bank’s policy meeting later in the day. Back home, market participants adopted cautious approach ahead of Industrial production data for the month of December 2012 and Wholesale Price Index (WPI) for the month of January 2013 to be released in upcoming week. Some pressure also came in from selling in Cement counter after Cement majors such as ACC and Ambuja Cements slipped over 1 per cent in early trade after both the companies reported weaker than expected earnings for the December quarter on February 7, 2013. However, software and technology stocks remained on the buyers’ radar, capping some losses during the trade, after Cognizant earnings, as the result conformed that revenues of Indian software services exporters continue to outperform Cognizant's, making the US-listed IT company still not too much of a competitive threat. Finally, the BSE Sensex lost 95.55 points or 0.49% to settle at 19,484.77, while the S&P CNX Nifty declined by 35.30 points or 0.59% to end at 5,903.50.