Markets to extend their somber run in the new week too

The Indian markets continued their declining trend on Friday, though some renewed buying at the lower levels capped the losses for the day. Today, the start is likely to remain sluggish on weak global cues. Though, the marketmen may take some support with Chief Economic Advisor Raghuram G. Rajan's statement expressing optimism of the economy growing by over 6 percent during the current fiscal. There will be some buzz in the power sector, as the Finance Minister P Chidambaram has said that the Cabinet will take a view on price pooling of coal to address the fuel supply issue. He has also said that price pooling may assist in addressing the supply of fuel in a reasonably satisfactory manner. Meanwhile, in a bid to further simplify the foreign investment regime, government has came out with the revised consolidated guidelines on FDI, which includes policy changes in sectors like single brand retail, asset reconstruction companies (ARCs), power exchanges, civil aviation, broadcasting. Though, the telecom stocks are likely to remain under pressure, as apart from some regulatory actions it has been reported that foreign direct Investment in India’s telecom sector has plunged to $93 million in the April-January period compared to $ 1.99 billion in same period last year.

The US markets suffered decline on Friday on getting weaker monthly jobs data, though there was some recovery in latter part of the day, as despite lesser jobs growth the unemployment rate unexpectedly dipped to 7.6 percent, hitting its lowest level since December of 2008. Most of the Asian markets have made a soft start and barring Japan, all the major indices in the region are trading in red.

Back home, key domestic benchmarks continued their southward movement for third straight day with both the frontline indices ending the volatile day of trade slightly in red as concern about foreign funds selling continued to weigh after overseas investors sold shares worth net Rs 326 crore on April 4, 2013 and Rs 368 crore on April 3, 2013. Earlier, markets made a sluggish start with local markets hitting 26-week low as political uncertainty at the domestic front, slowing growth in China, US unemployment claims and the European Central Bank keeping interest rates unchanged remained the major reasons for the downfall. However, some buying was seen at lower levels that helped the markets to recover from the lows of the day in the final hour but it was not enough to bring markets back into the positive trajectory and Sensex ended the session below its crucial 18,500 mark while, Nifty managed to hold its psychological 5,550 bastion. Global cues too remained sluggish as European counters traded in the red in early deals as investors cautiously stayed on the sidelines ahead of the closely watched US nonfarm-payroll report. Back home, there was buzz in the NBFC applicants of the new banking licenses on a report that RBI has received 30 applications from different entities for opening new banks. On the other hand, there was selling in private banking stocks on reports that in RBI’s investigation, though there was no case of money laundering, but there were proofs of KYC lapse and banks could face a regulatory penalty for that. Selling in overall banking stocks too dampened the sentiments as Indian banks’ advances grew at a slower pace in 2012-13 compared with a year earlier, falling short of the central bank’s projection, hurt by lower demand for credit from companies in a slowing economy.  However, losses remain capped as sentiments got some support after sugar manufacturers viz. Bajaj Hindustan, Shree Renuka Sugars, Balrampur Chini Mills, Rana Sugar and Dhampur Sugar Mills edged higher after the government on April 4 partially decontrolled the Rs 80,000-crore sugar sector by giving freedom to millers to sell in the open market and removed their obligation to supply the sweetener at subsidised rates to ration shops. Finally, the BSE Sensex lost 59.47 points or 0.32% to settle at 18,450.23, while the CNX Nifty declined by 21.50 points or 0.39% to end at 5,553.25.