Markets to get another soft start tailing the decline in global markets

The Indian markets plunged in last session along with the other global markets but the reaction was devastating and the major indices lost close to three percent for the day, there was across the board selling after the rupee too slipped to its all time low, despite Chief Economic Advisor to the Finance Ministry Raghuram Rajan saying that the government is not short of options to tackle the fall of the rupee and will take actions as necessary. Today, the start of the market is most likely to be in the red, though the cut are not going to be that large of last session. However, the concern is likely to persist of the global conditions as well as of the domestic economy, as per the central statistical office data India's employment rate has slipped to 38.6% in 2011-12, from 39.2% in 2009-10. The number of unemployed rose to 10.8 million in January 2012, from 9.8 million in January 2010. Also, the retail inflation based on Consumer Price Index for agricultural labourers rose to 12.7 percent in May from 12.32 percent in April, due to rise in the prices of food items and fuel. There will be some buzz in the commodity related stocks after the notification on Commodity Transaction Tax (CTT). From July 1, CTT at 0.01 percent will be levied on various non- agricultural commodities. The oil and gas sector too will be in action, as the Cabinet may take up hike in natural gas price today.

The US markets extended their weakness for the second day and all the major indices were pummeled by another over two percent on concerns about the outlook for the Federal Reserve's stimulus program. Asian markets too are continuing their bearish trend amid concerns of Fed reducing its stimulus program and deepening Chinese slowdown.

Back home, Indian equity markets witnessed butchery on Thursday with both the major indices losing nearly three percentage points and recorded their steepest fall since February 2012, breaching major crucial support levels 18,750 (Sensex) and 5,700 (Nifty) on feeble global cues and depreciating rupee. A gap-down start of markets never looked in recovery mood and continued sliding till end, closing near the lowest point of the day. Selling was both brutal and wide-based as none of the sectoral indices on BSE were spared. However, counters which featured in the list of worst performers included realty, metal, banking, power and oil and gas. Sluggish global cues remained the major reason behind the sell-off in domestic markets. The sell-off began after Fed chairman Ben Bernanke confirmed that US economic growth was strong enough to begin tapering back on its $85 billion in monthly asset purchases later this year. Selling got intensified after European counters made a droopy start with all the indices tumbling over two percent in early deals. Sentiments also remain dampened after all the Asian counterparts shut shop in red with China shares slumping to their lowest levels since December after a preliminary survey showed manufacturing activity in the mainland hit a nine-month low. Back home, sentiments also got dented after Indian rupee slumped to an all-time low of Rs 59.97 as it would force the Reserve Bank of India (RBI) to defer easing of key policy rates. Cautiousness also crept in on report that the foreign direct investment (FDI) in India has declined by six percent to $5.47 billion during January-March quarter of the current calendar year despite government’s various efforts to promote the country as an investment destination. Some pressure also came in after shares of real estate and infrastructure companies plunged up to 10 per cent after the rupee slumped to a record low today raising concerns that the rising rupee would force the RBI to defer reduction in key policy rate going forward. Selling in Metal counter too dampened the sentiments as stocks like Hindalco, Jindal Steel & Power, Tata Steel, NMDC, Sesa Goa, Nalco, SAIL and Sterlite Industries edged lower on concerns about the health of the Chinese economy after a survey showed further slowdown in China’s manufacturing sector in June 2013. Additionally, banking shares remained under pressure falling up to 8 percent after the Fed said that it would start curtailing its monetary stimulus measures if the economy continues to recover. Finally, the BSE Sensex shaved off 526.41 points or 2.74% to settle at 18,719.29, while the CNX Nifty plunged by 166.35 points or 2.86% to end at 5,655.90.