Markets to make a cautious start, may get some recovery in late trade

The Indian markets despite showing an intraday recovery, lost their way in the final hours on profit booking and the major indices lost about half a percent more in last session. While, the mid caps remained the mood dampener, some large cap too started receding with no any major supporting cue in sight, either from domestic or global markets. Today, the start is likely to remain cautious, as the global sentiments remain grim. The GST issue will be on fore, as Parthasarathi Shome, Advisor to Union Finance Minister has said that more dialogues are expected between the Centre and states in the coming months and that there was no point of having a GST unless the distortions in indirect taxation for industry and commerce were reduced. There will be buzz in the Auto stocks as Heavy Industries minister Praful Patel in a letter to the FM has said that since diesel prices are being progressively increased to align with the market prices, it would be unfair to have 3 percent additional excise duty on the SUVs. The fertiliser stocks may remain in somber mood, as the subsidy payment worth Rs 31,580 crore is likely to remain outstanding to the manufacturers this fiscal. The PSU sector too may remain buzzing, especially SAIL, as the OFS issue will hit the market today. The government will divest 5% stake in the steel major. The aviation sector too may see some upmove as the government has abolished the Aircraft Acquisition Committee.

The US markets once again slipped into cautious mood and the major indices ended lower by half to one percent for the day. Traders concerned about situation in Cyprus overlooked a batch of upbeat economic data. While, the jobless claims came in below expectation, the existing home sales stood at a three-year high. Most of the Asian markets have started in red, heading for their worst weekly performance since October. Japanese market has fell the most, as the yen moved higher after new Bank of Japan governor Haruhiko Kuroda failed to outline any instant increase to stimulus in his maiden speech.

Back home, the carnage at Indian stock markets prolonged for yet another session as the benchmarks continued to sway to the tune of depressing global developments and deposed another half a percentage point on Thursday. Though, markets after an initial downfall traded firmly through morning session recapturing their crucial 19,000 (Sensex) and 5,800 (Nifty) levels on the back of energetic cues from US and some of the Asian equity indices. However, the key gauges suffered a setback in the last leg of trade as sudden bouts of profit booking emerged in the local markets following the somberness prevailing in European markets, post which the indices hit fresh 2013 lows, extending the sorrow of closing in the negative territory for fifth straight session. European counters fell as investors, already jittery over Cyprus’ debt crisis, were confronted with data showing Germany’s business activity lost steam in March. Back home, on the political front, President Pranab Mukherjee accepted the resignation of five Ministers belonging to DMK, which withdrew support to the UPA government on the Sri Lankan Tamils issue. Meanwhile, sentiments remained jittery after reports suggested Reserve Bank of India (RBI) initiating scrutiny of head offices and branches of ICICI Bank, HDFC Bank and Axis Bank, key accuse for money laundering, violation of regulations like Foreign Exchange Management Act (FEMA) and know your customer (KYC). Moreover, fears over the government being forced to call early elections or see its reform agenda weakening after a key ally withdrew from the ruling coalition this week, also weighed on investors’ sentiment. Sentiments also remained under pressure as stocks of power space hit rock bottom despite news that India is likely to see additional installation of 1300 MW to 1400 MW of solar power this year. Bucking the trend, shares of software and technology counters went through the roof after the US Federal Reserve at the end of the two-day monetary policy meeting on March 20, 2012, said it will keep up its bond buying to stimulate the US economy. Finally, the BSE Sensex lost 91.32 points or 0.48% to settle at 18,792.87, while the CNX Nifty declined by 35.65 points or 0.63% to end at 5,658.75.