Markets to get a soft start on sluggish global cues

The Indian markets witnessed a volatile trade in last session, while the mixed batch of earnings managed to hold the markets from falling, decline in some heavyweights pressured the markets. Today, the start is likely to be bit soft on sluggish global cues. Commodities movement in the international markets will be closely watched. There will be some buzz in the energy sector, as Prime Minister Manmohan Singh has pitched for subsidies for clean energy saying market forces alone would not be able to finance it. Deputy Chairman of the Planning Commission Montek Singh Ahluwalia too has said that the government was all for creating a viable and competitive domestic production base and incentivise use of clean energy in the country. There will be some action in the export oriented stocks as the government is likely to announce a host of incentives for sectors like engineering and textiles to boost shipments amid global demand slowdown. Private sector banks will see some pressure, as Financial Services Secretary will meet a deputy governor of the Reserve Bank of India, among other officials, to take a call on the course of action with regard to allegations of money laundering.

There will be some important result announcements to watch along with earnings reaction of TCS to watch. CRISIL, Indusind Bank, MRF and Essar Ports etc. will be announcing their numbers today.

The US markets pared all their gains of last session on a slew of disappointing earnings and as commodities resumed their sell-off amid ongoing worries over global growth. Bank of America reported a below estimate earnings and Yahoo provided a disappointing guidance. Asian markets have made a soft start tailing the decline in US markets and broad commodity basket. Yen too has turned stronger against the dollar putting pressure on the Japanese market.

Back home, Indian equity indices snapped the volatile day of trade on an absolute flat note on Wednesday as investors booked their profit after rally of over two and a half percentage points in previous two sessions. Though, markets started off on a positive note supported by Monetary Fund (IMF) report saying that India with its favorable interest rate-growth differential has an advantage in addressing deficit concerns this year. Moreover, rally in rate sensitive stocks too aided the sentiments as slowing wholesale price inflation has raised rate cut expectations. Asian counters too shut shop mostly in green with Japanese Nikkei surging by over a percent as the yen weakened after the IMF raised the growth forecast for Japan. However, weakness in European markets took their toll on domestic sentiments in second half. Back home, some cautiousness also came in from fall of about four percent in index heavyweight Reliance Industries as its top line dropped 1.4% to Rs 86,618 crore and debt rose to Rs 72,427 crore at the end of the quarter. Though, the company posted a 32% increase in its fourth quarter net to Rs 5,589 crore, the biggest rise in nearly three years. Selling was also witnessed in software and technology counters as Indian rupee hit a new seven week high at 53.77 per dollar versus its previous close of 54.15/16 supported by broad risk-rally in regional markets. Additionally, public sector oil marketing companies (OMCs) viz. BPCL, HPCL and IOC edged lower after petrol price was on April 15 cut by Re 1 per litre, the third reduction in rates in one month. The price cut, which was made possible because of fall in international oil prices, excludes local sales tax or VAT. However, the losses remain capped as FMCG counters garnered a gain of over a percent on reports of likely normal monsoon this year. Stocks from infra sector too rallied on the buzz that the Ministry of Road Transport and Highways is targeting national highway contract awards worth about Rs 90,000 crore spanning 7,300 km this fiscal. Finally, the BSE Sensex lost 13.77 points or 0.07% to settle at 18,731.16, while the CNX Nifty declined by 0.25 points to end at 5,688.70.