Markets to get a cautious start on mixed global cues

The Indian markets lost their steam in final hour and closed lower, snapping their four days gaining streak. Today, the start is likely to remain cautious on persisting threat of Standard & Poor’s downgrade. However, Finance Minister P Chidambaram has said that India deserves a rating upgrade in view of improvement in macro-economic situation. The oil and gas companies will see some reaction to the Oil Ministry Cabinet note to raise the price of natural gas produced by state-owned as well as private firms to $6.7, less than $8-8.5 hike previously expected.Traders will also be eyeing the movement of rupee as the Indian currency fell to a five-and-a-half month low in last session. There will be buzz in the PSU banking stocks as the Finance Minister has once again voiced for the consolidation of the public sector banks and has said that some among the 26 state-owned lenders may be better off merging.

There will be some important result announcements too, to keep the markets buzzing. Astrazeneca Pharma, Dhampur Sugar Mills, JK Paper, JSW Ispat, Subex and Tech Mahindra are among the many to announce their numbers today.

The US markets made a lackluster start of the new week and all the major indices made a close marginally in red ahead of the crucial testimony of Federal Reserve Chairman Ben Bernanke’s before the Joint Economic Committee of Congress. The Asian markets have made a mixed start with some of the indices marginally in red. Japanese market too was in red despite the yen dropping against other major currencies ahead of the Bank of Japan’s two days policy meeting.

Back home, Monday turned out to be a disappointing performance for the stock markets in India as the benchmark equity indices failed to extend its initial rally and settled the session in red at the end as traders resorted to profit booking after the index hit 31-month high level. The frontline equity indices traded on a sanguine note for most part of the day on rising optimism about global growth with frontline gauges, at one point of time, surpassing the psychological 20,400 (Sensex) and 6,200 (Nifty) levels. Strong fund flows remained the biggest driver of the initial rally. So far, foreign investors have invested around Rs 12,000 crore (about $2.2 billion) into the Indian equity market this month. With this, the total foreign investment in the country’s equity market has reached Rs 73,029 crore ($13.5 billion) since January. Supportive cues from US markets provided the much needed support to local markets in first half. Back home, profit booking in the last leg of trade mainly played spoilsport for the Indian markets, dragging the frontline gauges below the psychological 6,200 (Nifty) and 20,300 (Sensex) levels. Major disappointment came in from selling in pharma space with stocks like Ranbaxy Laboratories, Lupin, GlaxoSmithkline Consumer Healthcare, Venus Remedies and Elder Pharma edging lower after the government’s notification on the new Drug Price Control Order (DPCO). The new order will bring 652 drugs under price control and will enable the National Pharmaceutical Pricing Policy 2012 to regulate prices of 348 drugs covered under the National List of Essential Medicines (NLEM) 2011. Realty stocks too edged lower on profit booking after recent gains triggered by expectations that the RBI may further cut policy rates to perk up economic growth after the latest data showed a sharp fall in wholesale price inflation in April 2013. Finally, the BSE Sensex lost 62.14 points or 0.31% to settle at 20,223.98, while the CNX Nifty declined by 30.40 points or 0.49% to end at 6,156.90.