Markets to get a cautious but positive start of the new week

The Indian markets suffered cuts of over half a percent on Friday as traders opted to book some profit from the recent rallies. Today is the start of another holiday shortened but crucial week, as the RBI will be announcing its much awaited annual monetary policy review on Friday. Traders will be eyeing the development in parliament as passage of lots of important reform measures along with Finance Bill and Rail Budget are held up due to logjam in Parliament. Though there will be some respite for the markets as the India Meteorological Department forecast normal monsoon throughout the country, a major relief from the fear of a rise in inflation. However, the met department has said that the rain fall in southern states including Kerala, Tamil Nadu and Karnataka will be lesser than normal. There is some good news for realty and infra stocks, as the government is considering a relaxation in external commercial borrowing (ECB) norms for raising funds through the ECB window, particularly for low-cost housing and infrastructure sectors like telecom and ports. There will be some buzz in the export sector too, as worried over widening trade gap, the government has set up a six-member inter-ministerial committee under the chairmanship of Finance Secretary to suggest measures to boost MSME exports.

Also, there will lots of important result announcements, including HUL, Hexaware, Bank of Maharashtra, Exide Inds, State Bank Mysore, IOB, KPIT Cummins and Sterlite Inds.

The US markets made a mixed closing on Friday after the GDP growth numbers came lower than expected, also the consumer sentiments eased, making the investors cautious. The Asian markets have made a mixed start, though the Japanese and Chinese markets are closed today but some others are moving higher on expectation that central banks will continue with their loose monetary policy stance.

Back home, Indian equity benchmarks snapped the first day of new F&O series on a disappointing note as investors booked profits in rate-sensitive sectors such as banks, automobiles after four consecutive sessions of gains. Frontline indices ended the session with a cut of over half a percent, declining below their crucial 5,900 (Nifty) and 19,300 (Sensex) levels as investors preferred to remain on the side-lines ahead of the Reserve Bank of India’s (RBI) monetary policy meet next week. Markets, after a subdued opening, traded range-bound in the absence of any positive trigger on the domestic front. In the noon session, markets tried to make some recovery backed by better than expected fourth quarter numbers from Maruti Suzuki. The company has reported a rise of 93.74% in its standalone net profit at Rs 1239.62 crore as compared to Rs 639.84 crore in Q4FY12. But, it was not enough to bring the markets into positive terrain. Selling got intensified after European markets opened in the negative terrain as disappointing earnings propelled investors to book profits after five straight sessions of gains. Back home, sentiments also remained dampened as software and technology counters felt selling pressure during the trade on weak economic data in the US, the biggest outsourcing market for the Indian IT firms. Selling in banking stocks too weighed on sentiments as scrips like, SBI, Union Bank, ICICI Bank, Axis Bank, Bank of India, Canara Bank and Indusind Bank all edged lower after recent steep gains, as rate-cut hopes were seen as overdone. However, the losses remained capped as investors got some relief after data showed that Foreign Institutional Investors’ net buying was of Rs 1450 crore worth of shares on April 25, 2013. Some encouragement also came in with government pitching for a rating upgrade at a meeting with ratings agency Standard & Poor’s. Officials arguing that the outlook should be changed and the country deserved an upgrade for actions taken by the government to put finances in order and bolster investor confidence. Finally, the BSE Sensex lost 120.13 points or 0.62% to settle at 19286.72, while the CNX Nifty declined by 44.85 points or 0.76% to end at 5,871.45.