Markets to get a cautious start of the new week

The Indian markets continued their decline in last session on getting some weak set of earnings and concern of more downgrades in the economy after RBI’s action. Today, the start of the new week is likely to be soft-to-cautious. It’s a data heavy week with RBI’s policy announcements scheduled tomorrow that can keep the markets watchful. Global developments too will decide the course of market trend during the week. Rupee movement will be watched, as the domestic currency had hit a five-week high in last session and the RBI's measures seemed working, but the unit gave up most gains as sustained dollar demand from importers to meet month-end import commitments weighed. Market will also be eyeing the Prime Minister Manmohan Singh’s meeting with the Council on Trade and Industry today, where high interest rates with a raft of other factors as being responsible for inhibiting industrial growth is likely to be considered. There will be buzz in the telecom sector, as the government has received Rs 1,770-crore investment proposal from a domestic company for the manufacturing of telecom products. Aviation sector too will be in action, as the government will take a call on the largest FDI in civil aviation.

There will be lots of important result announcements too, to keep the markets ticking. 3I Infotech, Allahabad Bank, Bharti Infratel, Indian Bank, IDFC, Jaiprakash Associates, MCX, Merck, Network18 Media, Sesa Goa, Syndicate Bank, Ultratech Cements and Vijaya Bank are the mojor companies to announce their numbers today.

The US markets managed a flat but positive closing on Friday; traders concerned about the next week’s important economic reports even overlooked good consumer sentiment data. The Asian markets have mostly made a soft start. Japanese market has slumped over two percent ahead of a speech by Bank of Japan Governor Haruhiko Kuroda. Weakness in commodities stocks too was weighing on the mood of the regional markets.

Back home, extending southward journey for the third consecutive day, Indian equity markets ended the Friday’s trade in red with both frontline gauges tumbling below their crucial 5,900 (Nifty) and 19,800 (Sensex) levels. Though, markets opened on the positive note with sentiments remaining upbeat after the Prime Minister’s Office (PMO), with an aim of fast-tracking infrastructure development, set deadlines for steps to implement key projects covering sectors like railways, highways and power. But, indices started paring gains as investors turned cautious on report that Crisil 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. Meanwhile, investors opted to remain on sidelines ahead of Reserve Bank of India’s (RBI) monetary policy review on July 30, 2013, which would decide the markets trends in near term. Selling got intensified as European markets, after a positive start, took U-turn to enter into red terrain in early deals, as investors remained on sidelines ahead of Fed and the European Central Bank meeting next week. Back home, investors continued to offload metal and mining shares for third consecutive day after China ordered companies in 19 industries to cut excess production capacity, raising fear that the demand is set to slow in the biggest consumer of the metal. Moreover, retail related stocks traded under pressure, as the MSME Ministry said that global multi-brand retailers must have to comply with the mandatory 30 per cent sourcing norm from small industries. Disappointing earnings from Punjab National Bank and Bank of India added to the pressure of banking pivotal. While, Bank of India lost over 4.50% on reporting 9% growth in Q1FY14 net profit, Punjab National bank shares hit 4 years low due to rise in bad loans. Lower than estimated Q1 numbers from HUL too dampened the sentiments. The company reported 23.43% fall in its net profit after tax at Rs 1019.25 crore for the quarter as compared to Rs 1331.19 crore for the same quarter in the previous year. Finally, the BSE Sensex lost 56.57 points or 0.29% to settle at 19,748.19, while the CNX Nifty declined by 21.30 points or 0.36% to end at 5,886.20.