Markets to see some recovery with a positive start of the new week

The Indian markets witnessed tumultuous truncated week and when other markets recovered on the last session then even they continued declining. Today, the start is likely to be in green as the other global markets have stabilized and traders too will take opportunity for some value picking after the previous weeks’ fall. However, traders will be closely eyeing the inflation data for the month of Octobers to be announced later in the day and which is being estimated to remain flat as of the previous month. RBI’s tighter monetary policy had little effect on high food and energy prices hence the numbers might not be better. Inflation for the month of September stood at 9.72 percent. Also, Finance Minister, Pranab Mukherjee’s statement that the country’s GDP growth for the second quarter may be lower than 7.7%, too is likely to weigh on the sentiments. Mukherjee also admitted that private investment has slowed down, due to subdued sentiments.

Today is the result heavy day and scrip specific actions will keep the markets buzzing. Adani Enterprises, Areva T&D, Balrampur Chini, BHEL, Bhushan Steel, Mahindra & Mahindra, MMTC, Jaiprakash Associates, Oil India, Sobha Developers etc are among the many to announce their numbers today.

The US markets extended gains on Friday on getting good domestic economic reports and sign that the European turmoil will stabilize. The Asian markets have made a good start and most of the indices are trading higher by over a percent, rejoiced by the report that Japan’s economy grew for the first time in a year and formation of new governments in Greece and Italy.

Back home, Indian stocks markets snapped yet another depressing session with cuts of around a percent on the last trading day of the week. Unlike to the recent trends, the benchmarks had only the domestic economic reports and earnings to blame this time for their debacle as markets across the globe largely moved higher. The surprisingly worse than expected IIP numbers dampened investors’ mood as industrial growth nosedived to the lowest levels in around two years to 1.9% in September, compared to 3.6% in August against forecasts of 3.5%. The fall in IIP reading confirms slowdown in the nation’s economic activity, which is adversely impacted by the stubborn inflationary pressure and thirteen lending rate hikes by the RBI since March 2010. Moreover, the disappointing earnings announcement by heavyweights like Tata Steel, Hindalco and DLF too dampened investors’ morale in the session. Meanwhile, market participants overlooked the slight moderation in weekly inflation data which showed that food inflation slipped slightly to 11.81% in the week ended October 29. Further downside for the local bourses was limited on hopes of gradual progress in Greece and Italy. Investors across the globe cheered developments from Greece where Lucas Papademos was named as PM of a new crisis government while in Italy Mario Monti is also likely to replace PM Silvio Berlusconi. Earlier on Dalal Street, the benchmark got off to a somber opening as sentiments remained bearish in the initial moments. Selling pressure intensified thereafter and the frontline indices hit the session’s lowest point in late morning session. Though constant attempts of recovery were seen in the session but marketmen took those opportunities to book profits off the table and pulled the bourses lower. On the BSE sectoral space, the Bankex index remained the top laggard in the space and settled with over three percent cuts followed by the Metal and Capital Goods pockets, which went home with over two percent cuts. However, the defensive Oil & Gas sector remained the top gainer in the space with gains of over three fourth of a percent after heavyweight Reliance Industries rebound in the session to settle with over two percent gains. Finally, the BSE Sensex lost 169.28 points or 0.97% to settle at 17,192.82, while the S&P CNX Nifty plunged by 52.20 points or 1.00% to close 5,168.85.