Markets to get another soft start on tepid global cues

The Indian markets continued their declining streak on Thursday and despite a good bounce back intraday, closed lower by about half a percent. Traders remained concerned about the S&P affirming their sovereign credit rating and adding that the outlook on Asia's third-largest economy remains negative. Today, the start is likely to remain weak tailing feeble global cues, traders will remain cautious ahead of another important jobs data from US. On the domestic front, lacking any supportive cues, the Standard & Poor’s warning of a downgrade after the general election, will keep the markets under pressure. There will be some buzz in the PSU sector, as the government has cleared a proposal for follow-on public offering of state-run Power Grid to raise about Rs 7,500 crore. On the other hand the PSU oil marketing companies too will remain in action after the government sanctioned Rs 17,772 crore cash subsidy to fuel retailers to cover for half of the revenues they lost on selling diesel and cooking fuels below cost in the September quarter. The telecom stocks too may see some action, as the Telecom Commission has told the telecom regulator to recommend the reserve price for the 800 MHz band within 15 days.

There will be some important result announcements too, Aditya Birla Chemical, BEML, Chambal Fertilizers, Crompton Greaves, Divis Lab,  Dunlop India, Great Eastern Shipping, Indian Bank, Indian Hotels, IOC, PNB, RCF, Sun TV Network, Tata Motors and United Spirits and among many to announce their numbers today.

The US markets suffered sharp cuts in last session as some upbeat economic data raised concerns about the outlook for the Federal Reserve's stimulus program. The US gross domestic product rose by 2.8 percent in the third quarter, much better than expected 2 percent. The Asian markets have made a soft start with some of the indices trading lower by around a percent on concern that the Federal Reserve may reduce stimulus sooner than expected. Chinese market was down ahead of the release of industrial production, inflation and retail sales data tomorrow.

Back home, Indian markets showed a very volatile trade on Thursday, the benchmarks turned the sluggish start into a bullish rally which again fizzled out in final hours of trade. The major indices that looked consolidating in early session, picked up pace towards the noon and kept their momentum intact. Pre Diwali celebrations seemed resuming their course after two sessions of lull as traders even ignored the lingering weakness in the domestic currency, which continued declining for the fourth straight day, trading near its two months low. But there was sudden selling pressure that dragged the markets into red on some weak result announcements and the benchmarks ended at the day’s low. The global cues were not very jubilant and gave a cautious start to the local markets. After the mixed closing in US markets the Asian markets made a closing mostly in red with some of the indices suffering cut of over half a percent ahead of US growth and jobs data. Though, the European markets made a slightly weak start, as investors awaited the European Central Bank’s interest rate decision. Back home, the local markets after a cautious start, tailing the weakness in regional counterparts got a sudden spurt in late morning session that took the benchmarks to their day’s high. FII’s that have been on selling spree for last few session’s seemed returning to the markets on report that  output growth across emerging markets picked up in October, posting the fastest rise in seven months, while business expectations also rose from the previous month's near-record lows. The composite HSBC Emerging Markets index for services and manufacturing rose to 51.7 from 50.7 in September. Though, some cautiousness returned to the markets after global rating agency Standard & Poor's affirmed their sovereign credit rating on India, adding that the outlook on Asia's third-largest economy remains negative and said that they may lower the rating to speculative grade next year if the government that takes office after the general election does not appear capable of reversing India’s low economic growth. There were some weak earnings number that too dampened the market sentiment, Tata Coffee slumped by around 8% on reporting numbers that missed the estimates, while India Cements too slumped on reporting poor numbers. However, the IT pack remained in jubilant mood for yet another day and gained over a percent on BSE, as the fall in the Indian rupee against the US dollar boosted sentiment. Apart from IT, tech and metal no other sectoral gauge showed any resistance. Finally, the BSE Sensex lost 72.17 points or 0.35%, to settle at 20822.77, while the CNX Nifty declined by 27.90 points or 0.45% to settle at 6,187.25.