Markets to remain in somber mood with a subdued start

The Indian markets remained in somber mood in last session and despite a positive start could not keep their momentum going and ended with loss of about half a percent in last session. Today, the start is likely to be subdued on soft regional cues, traders will be eyeing the movement in rupee that slipped to its five-week low in last session due to dollar buying by state-run banks to meet the demand of corporates. Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that India “clearly and unambiguously” needs to ink more free trade pacts, while Commerce and industry minister Anand Sharma has clarified that India's exports gained from the regional and bilateral free trade pacts. There will be some buzz in the banking sector, as the Reserve Bank of India (RBI) has come out with its detailed guidelines on how foreign banks will operate in the country. It has said that foreign banks can enjoy "nearly equal terms with local lenders if they move to a wholly owned subsidiary structure." There will be some buzz in the oil marketing companies too, as the Ministry of Petroleum & Natural Gas has requested the Finance Ministry to review the duties levied on branded auto fuels (petrol/diesel) to bring down the price differential with non-branded or regular fuels.

Also, there will be lots of important result announcements. Aurobindo Pharma, Cummins India, Eicher Motors, Glodyne Tech, India Cements, MOIL, Radico Khaitan, Spicejet,  Tata Coffee, Tech Mahindra and VA Tech Wabag are among the many to announce their numbers today.

The US markets made a mixed closing despite a notably good upside in early trade and traders seemed somewhat reluctant to make any significant moves ahead of the release of some key economic data later this week. The Asian markets have made mostly a negative start and some of the indices are trading lower by over a percent ahead of US economic reports and the European Central Bank’s policy meeting.

Back home, Indian markets remained in consolidation mood on Wednesday, though the start was in green and the major indices managed to hold the gains till noon but later the profit booking dragged the markets lower and despite some small attempts, markets could not recover till the end. There was profit booking reported by FIIs that has led the markets lower from their all time highs. Benchmark indices lost their traction in second half and closed near the lows of the day, broader markets that have shown good resistance till long, too gave up and ended mixed. The global cues remained sluggish with the US markets ending mostly in red, while the Asian markets too, after swinging between red and green made a mixed closing with the Japanese markets showing a big turnaround, ending higher by about a percent on getting some good corporate earnings. Though, the European markets made a good start. Back home, Indian markets were unable to get any respite with the positive trade in European counterparts, instead selling intensified in the last leg of trade on getting mixed set of earnings, while BHEL disappointed, ABB came with an extremely good set of numbers. Earlier the major indices bucking the global sluggishness made a positive start and it seemed that markets will recover from their last sessions fall, taking cues from the statement of Finance Minister P Chidambaram that India’s current account deficit (CAD) will be contained below $60 billion this financial year as against an earlier estimate of $70 billion. But the indices started showing fatigue and selling came on fore with the progress of trade and traders opted to take their profits off the table. The weakness in rupee too weighed on the sentiments that remained lower since morning and once again breached the 62 per dollar mark on concern of state-owned refiners resuming dollar purchases, which will limit the positive impact of overseas dollar inflows. Sectorally the day was of IT, which remained in upbeat mood since morning after the global IT major Cognizant Technology Solutions Corp reported a better-than-expected 22 percent rise in revenue, helped by contracts from insurers setting up online exchanges as part of President Barack Obama's healthcare reforms and raised its full-year forecast for both profit and revenue. However, the banking stocks remained one of the major laggards despite two of the major banks SBI and HDFC bank increasing their base lending rate, a move other banks are also likely to follow. The telecom gauge also kept buzzing after a government panel recommended raising the reserve price for mobile phone spectrum auctions by 15 percent more than the price suggested by Trai in the 1800 megahertz band, and by 25 percent in the 900 megahertz band. Finally, the BSE Sensex lost 79.85 points or 0.38%, to settle at 20894.94, while the CNX Nifty plunged by 38.00 points or 0.61% to settle at 6,215.15.