Markets to get a soft start on feeble global cues

The Indian markets in last session, once again turned lower and profit booking was evident in all the gainers of rally in last couple of days. Today the start is likely to be soft tailing the sell-off in the global markets and traders will be cautiously eyeing the Wholesale Price Index-based (WPI-based) inflation numbers for February, to be released later in the day. After the slide in CPI numbers it will provide a crucial input to the Reserve Bank of India (RBI) for its monetary policy review due on 1 April. Meanwhile, the India Inc reiterated its demand for an interest rate cut by the RBI to kick-start investments. There will be some buzz in the money market too, as the RBI has hiked trade related remittance limit from Rs 2 lakh to Rs 5 lakh per transaction.

The US markets went through a very bad day in last session with major indices losing over a percent on lingering overseas concerns, which overshadowed some upbeat US economic data. There was report of stronger than expected retail sales and an unexpected decrease in initial jobless claims in the week ended March 8th. The Asian markets have made a weak start as Chinese economic data missed estimates and Ukraine crisis, overshadowing signs of improvement in the US economy.

Back home, Thursday’s trading session turned out to be a disappointing session of trade for the Indian equity markets, as market participants booked all their initial gains ahead of Wholesale Price Index (WPI) data for the month of February. Though, India’s inflation rate based on the wholesale price index is expected to have eased to a nine-month low of 4.9% in February from 5.1% the previous month. The domestic benchmarks traded in a narrow range, but in the green terrain, for most part of the trades but a sharp wave of selling, which emerged in last leg of trade, dragged the key gauges below their crucial 6,500 (Nifty) and 21,800 (Sensex) levels. Earlier, domestic bourses made a positive start as sentiments remained jubilant after the consumer price index (CPI) for February eased to 8.10 percent from 8.79 percent in January, its lowest level since January 2012. Meanwhile, the index of industrial production (IIP) in January stood at positive 0.1 percent, highest since September 2013, against an expectation of continued contraction. However, a sudden slide in last leg of trade pulled key benchmark indices from positive zone to negative terrain as investors turned cautious after China released another batch of disappointing data, adding to fears about growth in the economic giant. Moreover, weak opening in European counters too weighed on sentiments, however, most of the Asian equity benchmarks ended in the green terrain. Back home, trade was also under pressure after the Securities and Exchange Board of India (SEBI) tightened norms to prevent money laundering through the capital market and asked capital market entities to conduct a detailed risk assessment of their clients, including those linked to countries facing international sanctions. Meanwhile, software and technology counters witnessed blood-bath, led by over 8% fall in Infosys on reports that IT major expects sluggish growth in January-March (Q4FY2014) quarter mainly due to muted spending by clients, especially in the retail sector. Finally, the BSE Sensex declined by 81.61 points or 0.37%, to settle at 21774.61, while the CNX Nifty lost 23.80 points or 0.37% to settle at 6,493.10.