Markets likely to remain in consolidation mood tailing feeble global cues

The Indian markets came under consolidation mood in the last session and lost their way in the second half after a decent start. Today, the mood is likely to remain somber and the indices may consolidate further on feeble global cues. Traders will be watching the start of the Budget Session of Parliament, though it’s likely to be a peaceful one as Home Minister Sushil Kumar Shinde has expressed regret over his remarks on the Hindutva terror, however opposition is determined to raise issues like corruption and inflation. Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia has stated that the 12th Five Year Plan lays emphasis not merely on economic development but on inclusive growth to bring more poor and marginal people under its ambit. The aviation sector is likely to keep buzzing with the Tata's re-entry into the aviation market with Malaysian low-cost carrier AirAsia. Meanwhile, after a day of  Jet Airways offering 20 lakh seats at Rs 2,250, IndiGo, SpiceJet and GoAir  followed suit, even Air India launched special fares. The steel sector too will be watched, as global steel output dipped in January, increasing by just 0.8 percent.

The US markets suffered a sharp sell-off and ended lower on Wednesday after Fed released the minutes of the latest meeting of the Federal Open Market Committee showing that the number of participants indicated that the asset purchase program might be tapered or ended before there is a substantial improvement in the outlook for the labor market. The Asian markets have made a soft start tailing the US markets and barring the Jakarta index rest all are suffering huge losses.

Back home, Indian markets after two straight sessions of impressive rally appeared in a consolidation mood on Wednesday. Though, the global cues remained jubilant but traders opted to take some breather ahead of the Budget session of Parliament which will start from February 21, 2013. Nevertheless, the markets managed to keep their head above water led by oil & gas sector which remained the top gainer, led by rally in index heavyweight Reliance Industries (RIL) after the company announced its joint venture with BP plans to invest more than $5 billion in the next three-five years to boost gas output in the KG D6 block in the Krishna-Godavari basin. Sentiments also got some boost after investors continued to pile up position in infrastructure related stocks after Finance Minister P Chidambaram called for more innovative financing solutions for sector to encourage greater private participation in investment of the infrastructure sector. For 12th five year plan (2012-2017), investments in the infrastructure sector has been pegged at around $1 trillion and the share of private participation in the total investment in infrastructure is projected at 47 per cent. Supportive cues from Asian markets also provided the support to local markets. Back home, stocks of technology and software counters too remained on the buyers’ radar while, shares of three state owned oil marketing companies BPCL, HPCL and IOC also edged higher on renewed buying after they raised diesel prices by 45 paise a litre and petrol by Rs 1.50 per litre with effect from February 16, 2013. However, the gains in software and technology stocks were offset by selling pressure seen in telecom stocks which traded lower for a second consecutive session after the Department of Telecom (DoT) decided to auction 900 mhz spectrum as planned earlier. At the same time, several sugar stocks like Balrampur Chini, Triveni Engineering and Rana Sugars dipped in red. High cost of production and low realisation is likely to pull down operating profit of sugar companies during the ongoing season 2012-13 (October-September). Finally, the BSE Sensex gained 7.03 points or 0.04% to settle at 19,642.75, while the S&P CNX Nifty rose by 3.35 points or 0.06% to end at 5,943.05.