Markets to get a positive start on good global cues

The Indian markets extended their bear run for yet another day in last session and the major indices slipped to their one week low on concern of foreign fund inflow. Bluechips lost their traction, while the rate sensitives’ suffered profit booking after their recent rallies. Today, the start is likely to be flat but in positive terrain and the markets may see some recovery on good global cues. There will be some buzz in the oil & gas sector as the Oil Minister M Veerappa Moily has asked the Vijay Kelkar panel on energy security to suggest roadmap for freeing natural gas prices by March 2017, earlier Rangarajan panel had suggested freeing of gas prices in 3-5 years. The oil marketing companies too will be in action, as the Competition Commission of India (CCI) has started investigation into alleged cartelisation by oil marketing companies in fixing petrol prices. There will be some jubilation in sugar stocks, as the Uttar Pradesh cabinet gave in to a long-standing demand by the sugar industry to extend stamp duty and land registration waivers to existing as well as new sugar mills.

There will be some important result announcements too, to keep the markets buzzing. L&T, Burnpur Cements, KEI Inds, Thermax and Zee Entertainment are among the many to announce their numbers today.

The US markets closed modestly in green on Tuesday on some better than expected results and ahead of Federal Reserve Chairman Ben Bernanke’s testimony on Wednesday. Most of the Asian markets have made a green start taking cues from the US markets and before the Bank of Japan concludes a two-day policy meeting.

Back home, extending their southward journey for second straight day, Indian equity benchmarks ended the session with a cut of over half a percent with frontline gauges tumbling below their crucial 6,150 (Nifty) and 20,200 (Sensex) levels on the back of feeble global cues. Despite recovering in afternoon deals, benchmark equity indices failed to negotiate a positive close weighed down by the vicious selling pressure in the dying hours of trade. Some pressure also came in after investors offloaded their holding in rate sensitive counters viz. banking and auto after recent gains triggered by rate cut hopes. Sentiments also got dented after Barclays Capital lowered India’s growth forecast to 6 per cent for 2013-14, from earlier projection of 6.2 per cent, citing recent disappointments in economic activity. The brokerage firm cautioned that there is a possibility of further downside risks to growth, especially in the near term as the Reserve Bank of India’s (RBI) policy interest rate cuts in recent months has not been translated into reduction in bank lending rates. Selling got intensified in last leg of trade with European counters opened in red. Back home, downward momentum was also supported by massive selling in realty counter as investors continued to book their profit for second consecutive day 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. Additionally, oil and gas companies which moved higher in early trade mainly reacting to the Oil Ministry’s Cabinet note to raise the price of natural gas produced by state-owned as well as private firms to $6.7, i.e., less than $8-8.5 hike previously expected, edged mostly lower by the end of trade. Bucking the trend, software and technology space garnered a gain of about half a percent on account of weak rupee, since most of software firm derive their income in foreign currency. Finally, the BSE Sensex lost 112.37 points or 0.56% to settle at 20,111.61, while the CNX Nifty declined by 42.80 points or 0.70% to end at 6,114.10.