Markets likely to get a gap-down start after three straight days of gain

The Indian markets managed a positive closing in last session despite a huge round of volatility. Traders slightly overlooked the sharp depreciation in rupee, but today the start is likely to be a gap-down one, not only the global cues are feeble but the domestic development too are likely to weigh heavily on the sentiments of the marketmen today. There will be concern related to current account deficit (CAD) as Lok Sabha passed the Food Security Bill after considering all the amendments. The bill proposes subsidised foodgrain for up to 75 percent of the rural and up to 50 percent of the urban population. However, Prime Minister’s Economic Advisory Council chairman C Rangarajan has said that India may be able to contain its CAD to $70 billion, about 3.7 percent of GDP, in the current fiscal because of various steps taken by the government. Traders will also be eyeing the movement of rupee which went on crashing past 64.50 levels against the dollar in last session. There will be some action in infra sector, as the Cabinet Committee on Investment has decided to fast-track 36 stalled projects, including 28 power projects, with an investment of over Rs 1.5 lakh crore.

The US markets ended lower on Monday, though the trade remained in green for most part of the session but traders booked profit late in the day on worries about the situation in Syria. The Asian markets have mostly made a weak start after the comments from US Secretary of State John Kerry that the president will hold Syria’s government accountable for using chemical weapons.

Back home, Indian markets witnessed a very volatile trade to start the F&O expiry week. Though, the benchmarks managed a positive close despite slipping into red for a couple of time but bouts of selling were clearly visible at the higher levels, as the traders sensing the opportunity opted to book profit. Nevertheless markets managed to extend the gaining streak for the third straight day with Sensex crossing 18600 level, while the Nifty touching 5500 mark intraday. The markets got a jubilant start in the morning tailing positive global cues. On the global front, the US market gave a positive lead to the markets across the globe. The Asian markets mostly ended in green, with Chinese index surging by around two percent for the day. There was some cautiousness after the European markets made a sluggish start amid the conflicting talks of whether scope remains for further interest-rate cuts. Back home, the Indian markets in face of depreciating rupee and extreme volatility, managed to eke out modest gains on Monday. The rupee remained weak since the start, once touching the lows of 64.63 against the dollar, tracking the regional peers, which lost strength against the dollar and also there was heavy dollar demand from the oil importers. Meanwhile, the government looked concerned about attracting foreign inflows to mend its current account deficit. The Economic Affairs Secretary Arvind Mayaram was reported saying that the government is confident of meeting its fiscal deficit and current account deficit targets on the back of robust foreign direct investment flows and rising exports. Markets after a positive start could not sustain their momentum and fell on profit booking in the early noon session, though there was an attempt in noon but the bears seemed capitalizing, taking the markets into red. However, there was spurt in the metal stocks and later by the power stocks that led markets surge again but they were dragged by selling at higher levels. The power sector stocks got a fillip with the buzz that the Cabinet Committee on Investments (CCI) is likely to consider fast tracking Rs 49000 crore worth power plants of companies like Reliance Power, JSPL and Essar Power, stuck for want of environment and forest clearances at various levels. Finally, the markets ended in green where the broader indices outperformed the benchmarks with quite a margin. Power Capital Goods, Healthcare and Metal sector gained over a percent, while banking lost over a percent. Finally, the BSE Sensex gained 38.69 points or 0.21% to settle at 18,558.13, while the CNX Nifty rose by 4.75 points or 0.09% to end at 5,476.50.