Markets to see some recover on good global cues

The Indian markets were spooked by the global concern and the major indices lost around a percent in last session. Today, the start is likely to be in green and some recovery is expected tailing the gains in the global markets. Though, traders will be a bit cautious too on last trading day of the week. Also, as the International Monetary Fund after revising its previous forecast of GDP growth upwards to a 4.6 per cent in FY14 and further improving to 5.4 per cent in FY15, has recommended India to go for more interest rate hikes to tackle high inflation and its expectations. The coal and power stocks are likely to be buzzing with the Union Cabinet finally clearing the coal ministry’s proposal for setting up a regulator through an executive order for the coal sector. The telecom stocks too will be in action, as the Department of Telecom has issued the much-awaited guidelines for merger and acquisition (M&A) in the industry, which said the merged entity's market share should not exceed 50 percent. The new rules also permit telcos to enter into M&As within the lock-in period of three years during which new entities are barred from selling equity.

The US markets recovered after initial fall in last session, supported by Facebook deal and better than expected earnings from Electric car maker Tesla. Though, the major gains came with preliminary report that manufacturing in the US expanded at the fastest pace in almost four years in February. The Asian markets outside China have made a good start, as the US data tempered concern about global growth. Japanese markets bounced back after the yen turned weak, boosting exporters' shares.

Back home, Indian markets finally gave up on Thursday, snapping their four days gaining streak and the benchmarks lost around a percent for the day. It was almost the reversal of the last day’s trade when major indices after showing a range bound trade albeit in red, slumped for the worst in the final hours. Once started in red, market never looked gaining any strength and kept on slipping lower, which aggravated in the final moments of trade, dragging the benchmarks near the lows with Nifty losing its psychological level of 6100. Broader markets that showed some resistance in early trade too could not do much and ended flat. The market started weak on sluggish global cues, as the US markets turned lower overnight after release of minutes from Federal Reserve’s recent meeting where members agreed for further reduction in the pace of asset purchases. The Asian markets too ended in red, while the weak start in European bourses further dragged the domestic markets lower. Back home, Indian markets fared badly and lost more than double what they have garnered in last session, falling first time in last five sessions. The high flier of the last couple of trades, banking sector suffered severe selling pressure and all the major banks posted considerable losses in the range of 2-4%. SBI the country’s largest lender too lost about 2% despite being on verge of finalising a plan to improve profitability by tightening the belt on asset quality and boosting its fee income stream. The continuous weakness in rupee on dollar demand from oil importers amid weakness in emerging Asian currencies, too kept weighing the sentiments of the market. Meanwhile, traders also remained concerned on report that India recorded an average annual economic growth rate of 8 per cent during the 11th Five Year Plan (2007-12) compared to targeted 9 per cent. Sectorally, barring some resistance in Power and Capital Goods all other indices ended in red for the day. Telecom stocks were particularly under pressure as the guidelines for mergers and acquisitions of telecom companies are expected to be in place within 10 days which may disappoint phone companies because the government has refused to concede the demand that they shouldn't be required to pay market-linked prices for spectrum that comes with any acquisition. Finally, the BSE Sensex plunged by 186.33 points or 0.90%, to settle at 20,536.64, while the CNX Nifty lost 61.30 points or 1.00% to settle at 6,091.45.