Markets to extend the somber mood into new week

The Indian markets continued declining for all the training sessions in passing week and today the start of new week is likely to remain somber. There will be some action in export oriented stocks as the Reserve Bank of India (RBI) has permitted third party payments for export/import transactions subject to certain conditions. RBI also said that for the export as well as import transaction third party payment should come from a Financial Action Task Force (FATF) compliant country and through the banking channel only. However, there will be some jitters on the street too, as India has put investments from Cyprus under tax lens. Though, Cyprus has clarified that the tax treaty between the two countries has not been terminated and it will soon hold talks with Indian authorities to sort out the taxation issue. Infra stocks are likely to rejoice with Confederation of Indian Industry (CII) signing an initial agreement with the Geneva-based World Economic Forum (WEF) to collaborate in various spheres, including infra. There will be some buzz in the fertilizers sector too, as the Fertiliser Ministry has moved a proposal to the Cabinet to remove guaranteed buyback clause in the urea investment policy and adopt a bidding process. 

There will be lots of result reactions of earnings announced during weekend and those to be announced today. Apollo Tyres, Astrazeneca Pharma, BASF India, Britannia Inds, Central Bank, Corporation Bank, Glaxosmithkl Pharma, Godrej Consumers, Godrej Inds, Hexaware Tech etc are among the many to announce their numbers.

The US markets moved higher on Friday on getting good jobs data and traders rejoiced the numbers as it came in spite of partial government shutdown. The Asian markets have mostly made a soft start and there is concern that US Fed may go for tapering sooner than expected. Chinese market was marginally in red despite the industrial output of the country rose a more-than-estimated 10.3 percent from a year earlier in October. On the other hand the Japanese market has surged on yen weakness against dollar.

Back home, Indian markets were unable to get any respite on Friday and continued their decline for the fourth consecutive day, tailing tepid global cues and on concern that better than expected economic data from US will lead the Federal Reserve to go for stimulus tapering sooner than expected. Markets were also weighed down by some weak earnings numbers, while the continued rupee depreciation kept the sentiments weak for yet another day. On the global front there was sharp sell-off, after the US markets closed lower overnight reacting negatively to the report that gross domestic product rose by 2.8 percent in the third quarter, much better than expected 2 percent. The Asian markets followed the suit and majority of them suffered sharp cuts. Back home, the Indian markets never looked confident after making a sluggish start following the weakness in their global counterparts, making it a week of continuous fall, declining for all the trading sessions. Rupee continued its slide and pressured the markets too, though economic affairs secretary Arvind Mayaram assured that the currency will stabilise within a few days as strong inflows of NRI deposits and robust export proceeds are expected.  Traders remained in somber mood on report that emerging market growth, barring India, picked up pace in October and the HSBC Emerging Markets Index (EMI), stood at 51.7 in October significantly higher from 50.7 reported in September. There were some negative reactions to weak quarterly numbers that added pressure to the markets, shares of banking major PNB tanked after it reported net profit fall of huge 52.6 percent year-on-year to Rs 505 crore in the September quarter because of higher provisioning for bad loans. United Breweries too slumped after reporting net loss of Rs 18.57 crore for the second quarter ended September 30, 2013 as compared to a net profit of Rs 34.20 crore in same quarter last year. There were some scrip specific movements related to MSCI index changes, Nestle, Tech Mahindra, YES Bank, Allahabad Bank and PI Industries gained in early trade as they will enter the MSCI index on November 26. On the other hand Bank of India, Canara Bank, Unitech and Wockhardt reacted negatively to their exclusion. Finally, the BSE Sensex lost 156.62 points or 0.75%, to settle at 20666.15, while the CNX Nifty declined by 46.50 points or 0.75% to settle at 6,140.75.