Markets to get a flat-to-positive start of crucial week

The Indian markets continued their soft spell and ended lower by another half a percent in last session. The rupee breaching the crucial level of 57 weighed on the sentiments, while there was not much on the positive front. Today tailing the global cues, the start of the crucial data heavy week is likely to be flat to positive, as the IIP data will be announced on Wednesday and WPI inflation will be announced on Friday. Though, traders will be eyeing the movement of rupee and the markets may see some pressure because of a weak rupee. Also there will be cautiousness due to FICCI’s survey, which has said that business confidence dropped for a consecutive quarter in January-March 2012-13, according to it the business confidence stood at 57.4 as compared to 61.2 during the previous quarter. Traders may get some support with President Pranab Mukherjee’s statement who has asked people not to panic by negative sentiments expressed in certain quarters. Telecom stocks are likely to be in action as it has been reported that government will conduct the third round of spectrum auction within 70 days of receiving approval from an Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram.

The US markets spurted on Friday on getting a better than expected jobs data, on the one hand while the non-farm payroll employment increased, on the other the unemployment rate too increased that gave the traders some relief that Fed may not taper its bond buying program soon. The Asian markets have mostly made a positive start with Japanese market rebounding from the biggest weekly drop in a year as in a boost to Prime Minister Shinzo Abe, Japan has revised its growth to 4.1% in first quarter.

Back home, Friday’s trading session turned out to be a disappointing session of trade for the Indian equity markets, as market participants booked their intraday gains in absence of any major positive trigger. The frontline gauges, after a choppy start, gained strength as some support to the markets came in from Financial Services Secretary’s statement that domestic economy is likely to kick-start towards revival in the next 3 to 6 months as a large number of the 215 stalled projects are expected to start rolling. Rally in software and technology counters too provided the much needed support. But, market slipped into the negative terrain in late trade as investors lacked the conviction of staying long in risky equities. The psychological 19,700 (Sensex) and 5,950 (Nifty) levels proved as stern resistances as the key indices could not claw much beyond those levels, instead drifted lower. Global cues too remained choppy with most of the Asian peers ending in red, though, European markets exhibited mixed trend in early deals. Back home, sentiments remain dampened after partially convertible rupee broke the 57 per dollar level and fell to 57.04 against previous close of 56.85. Sentiments took a hit for the worst after selling intensified in banking counter after CBDT reportedly issued notices to four more banks on Cobrapost allegations. The four banks to which notice were issued are Allahabad Bank, Canara Bank, ING Vysya Bank and Bank of Baroda, which clobbered out of shape and ended with loss in the range of 1.25-3.75%. Meanwhile, Finance Minister asked banks to lower interest rates in an effort to drive growth and pass on rate-cut benefits to retail and corporate borrowers. Additionally, telecom stocks like, Reliance Communication, Bharti Airtel and Idea Cellular edged lower on reports that there will be another round of spectrum auction in August. Bucking the trend, software and technology counters remained the only gainers on the BSE sectoral front as the rupee hit near one-year low below 57 a dollar on caution ahead of the US monthly jobs data. Finally, the BSE Sensex lost 90.26 points or 0.46% to settle at 19,429.23, while the CNX Nifty declined by 40.40 points or 0.68% to end at 5,881.00.