Markets to make a soft start of the new week

The Indian markets ended deep in red in last session amid a broad base selling. Today, the start of the new week is likely to remain weak and traders will be cautious ahead of the outcome of the Reserve Bank of India (RBI) and the US Federal Reserve’s policy review meetings scheduled later in the week. Though, the broader expectations are RBI would opt for status quo on policy rates but anything unexpected may took the markets in either side. Traders will also be watching the movement of rupee that has weakened heavily against the dollar in last session. Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia attributing the decline in India's growth rate mainly to domestic factors has said that government needs to anticipate obstacles and take quick decisions. Today, the telecom stocks will keep buzzing, as the Empowered Group of Ministers on telecom headed by Finance Minister P Chidambaram will decide on the contentious issue of spectrum usage charges and long-awaited mergers and acquisitions norms. The oil and gas stocks to may see some action as the oil ministry hopes to receive a CCEA (Cabinet Committee on Economic Affairs) approval for its proposal to auction 86 oil and gas blocks by February 15.

There will be lots of important result announcements too, to keep the markets buzzing. Adani Ports, Adani Power, AIA Engineering, Allahabad Bank, Escorts,  Hindustan Unilever, Idea Cellular, Just Dial, Tata Elxsi, Welcorp and Welspun India will be among the many to report their earnings today.

The US markets slumped in last session on some weak earnings announcements and on global sell-off in the equity markets. The Asian markets have made a weak start on concern that global economic recovery is faltering. Japanese market is leading the losers pack as the yen soared to a seven-week high against the dollar.

Back home, Indian barometer gauges, snapping four days gaining streak, ended the Friday’s session with a cut of over a percentage point and frontline gauges tumbled below their psychological 21,200 (Sensex) and 6,300 (Nifty) levels amid weak global cues. After a negative opening, the domestic bourses never looked in recovery mood and continued sliding till end, closing near the lowest point of the day. Selling was both brutal and wide-based as none of sectoral indices on BSE could manage a green close. Counters, which featured in the list of worst performers, include realty, capital goods and consumer durables. Sentiments remained downbeat since morning, as banking stocks edged lower after the Reserve Bank of India’s governor Raghuram Rajan termed inflation as a ‘destructive disease’ and said that there can be no trade off with growth and prices have to be brought down. Selling got intensified after European markets made a sluggish opening, while Asian markets too ended mostly in the red. Back home, sentiments got clobbered after Indian rupee depreciated by 50 paise to 62.42 against the American currency at the time of equity markets closing on persistent dollar demand from banks and importers. Stocks of public sector oil marketing companies edged lower as Crude oil futures ended higher on January 23, extending their gains for the fourth straight session after US Energy Information Administration (EIA) reported that distillate stockpiles declined more than expected last week, though the traders overlooked the rise in crude and gasoline inventories. Sentiments also got hurt after, Ranbaxy Laboratories plunged by over 19 percent during the trade, after the US health regulators said that they are barring imported drugs from an overseas factory operated by Ranbaxy Laboratories due to quality control violations. Finally, the BSE Sensex plunged by 240.10 points or 1.12%, to settle at 21133.56, while the CNX Nifty declined by 78.90 points or 1.24% to settle at 6,266.75.