Markets to start the new series on a cautious note

The Indian markets snapped the good July series on a disappointing note with Sensex once again plunging below 20000 mark on weak global cues and concerns related to recent RBI liquidity tightening moves. Today, the start of the new week is likely to remain cautious, as the regional markets are not in good shape, while there is not much support on domestic front either. There will be some concern in the market after Crisil, the global rating agency revised downwards its GDP growth forecast for India to 5.5 percent this fiscal from its earlier estimate of 6 percent, citing reduced likelihood of monetary easing going forward due to falling rupee. Though, there will be some buzz in the infra sector on the buzz that the Prime Minister's Office (PMO) is targeting the award of at least 17 big infrastructure projects during this financial year. On the same time the retail related stocks will be slightly under pressure, as the MSME Ministry had said that global multi-brand retailers must have to comply with the mandatory 30 per cent sourcing norm from small industries.

There will be lots of important earnings trickling in, to keep the markets buzzing. Bank of India, CESC, Dish TV India, Eveready Inds, GIC Housing, Hindustan Unilever, JSW Energy, Mcleod Russel, Nestle India, Pfizer, PNB, State Bank Travancore, Sterlite Tech are among the many to announce their numbers today.

The US markets ended modestly higher in last session but the trade remained lackluster, extending the trend seen over the past few sessions. There were some good earnings and a positive economic report of rise in durable goods orders in June that helped the markets move higher. Most of the Asian markets have once again made a soft start led by Japanese Nikkei, as the yen remained steady against dollar after yesterday’s one percent advance. Chinese market too remained in somber mood ahead of the industrial profits data tomorrow.

Back home, Thursday turned out to be another disappointing session for the Indian equity indices which got pounded by around one and half percentage point on the last day of July series Futures and Options. Indian barometer gauges, prolonging their southward journey for second consecutive session, witnessed blood bath and closed near their lowest level in almost two weeks, breaching major crucial support levels 19,850 (Sensex) and 5,950 (Nifty) on feeble global cues. After a negative opening, the domestic bourses 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, barring software and technology; none of sectoral indices on BSE could manage a green close. Counters, which featured in the list of worst performers, include fast moving consumer goods, metal and healthcare. Sentiments also remained somber on report that foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on July 24, 2013. Selling got intensified after European markets made a poor start, as investors trod cautiously before German and British data, which are expected to add weight to signs the continent’s economy is reviving. Back home, sentiments remained down-beat with fast moving consumer goods counter bearing most of the brunt led by profit booking in ITC and Hindustan Unilever after recent rally. Selling in Metal counter continued for second straight day with shares of NMDC, Hindustan Zinc, Hindalco and Sterlite Industries edging lower after a private survey showed manufacturing weakened further in July in China. Sentiments also got dented after cement companies plunged, led by 10% fall in Ambuja Cement after Swiss parent Holcim announced a major restructuring of its India operations. Weak Q2 earning also weighed on the stocks. Additionally, banking stocks, continuing previous session’s fall, lost some more ground in Thursday’s trade with stocks like, SBI, Yes Bank, PNB, ICICI Bank etc tumbling after the RBI in another measure to suck out liquidity from the system asked banks to maintain higher average CRR (cash reserve ratio) of 99 per cent of the requirement on daily basis as against earlier 70 per cent. Finally, the BSE Sensex shaved off 285.92 points or 1.42% to settle at 19,804.76, while the CNX Nifty plunged by 83.00 points or 1.39% to end at 5,907.50.