Markets to get a cautious start tailing sluggish global cues

The Indian markets suffered sharp profit booking and despite good bounce back in late trade closed with loss of around half a percent. Today, the start is likely to remain cautious and the markets will continue consolidating with no support at upside. The telecom stocks will be in lime light today, as the telecom regulator, Telecom Regulatory Authority of India (TRAI) has stuck to its recommendations for steep cuts in the floor price of spectrum for upcoming auctions as well as on spectrum refarming. The Telecom Commission, the highest decision-making body of the Department of Telecommunications (DoT), will take a decision on the TRAI proposals and clarifications at its meeting likely to be held October 29. There will be buzz in the oil companies too, as it has been reported that the Petroleum Ministry has allowed companies to start producing oil and gas from discoveries even before field investment plans are approved. Meanwhile, industry body Assocham has sought Prime Minister’s intervention to end the “environment of distrust” which had arisen due to “half-baked cases” against industry leaders. CBI has registered eight more preliminary enquiries (PEs) in connection with issues related to intercepted phone calls of lobbyist Niira Radia.

There will be lots of result announcements to keep markets buzzing. Arvind, Biocon, Deepak Fertilizers, Idea Cellular, JK Tyre, Kotak Mahindra Bank, NMDC, PTC India, Rolta India and Thomas Cook are the majors to announce their numbers.

The US markets ended lower in last session on profit booking following the upward trend shown over the past two weeks. There were some disappointing earnings announcement too that weighed on the sentiments and kept the major indices in red for most part of the day. The Asian markets have made mostly a weak start with some of the indices extending their last session’s sharp fall, Japanese market was in red despite yen steadying after is surge.

Back home, it was mostly a one way slide for the Indian markets on Wednesday, when major indices after a positive start succumbed to profit booking. The local markets were also under pressure due to weakness in other global markets that prompted the investors take profit off the table. With most of the macro data announced, the trade remained largely concentrated on the second quarter earnings announcement of the India Inc and there were mainly result reaction in today’s trade. The major being Wipro, though it reported a decent profit numbers for the quarter ended September 30, but its revenue performance lagged to the top tier players, lost around five percent for the day, on the other hand Hero MotoCorp gained about a percent after reporting decent profit rise. There was a good recovery attempt supported by some bluechips in the last leg of trade but it failed to ramp up much support for the markets to bring them back in green. In the global markets, the early enthusiasm fizzled out and the Asian markets after mostly a green start ended majorly in red. Later the soft start of the European markets further pressurized the local markets and aggravated their fall. Back home, the markets despite a green start lost their traction in the very first hour of trade with traders opting to book profit after the recent rallies. The rupee that had made a strong start taking cues from the other emerging market currencies, too pared gains, though the IT sector which came under pressure due to rupee appreciation found difficult to recover. The banking sector specially the PSU banks were the star performers after the Finance Ministry finalized the bank-wise capital infusion plan aggregating Rs 14,000 crore by March next year.  Apart from the state owned banks, the whole PSU sector kept buzzing led by Gail India on report that the oil ministry has decided to exempt the company from having to compensate state fuel retailers for selling diesel, kerosene and cooking gas below market rates, as Gail does not make windfall profits when international crude oil and gas prices soar. Sugar stocks that have been surging since last two sessions continued their surge with some of the major producers adding considerable gains. On the other hand there was some cautiousness in cement stocks ahead of two major result announcements of ACC and Ambuja Cements, while Realty, power and IT were the prominent losers for the day. Finally, the BSE Sensex lost 97.09 points or 0.47%, to settle at 20767.88, while the CNX Nifty declined by 24.45 points or 0.39% to settle at 6,178.35.