Markets likely to make a soft start tailing regional peers

The Indian markets despite an attempt of recovery could not hold up to its gains and closed marginally in red in the last session. The rate sensitive’s remained under pressure, though the rupee made a good bounce back after RBI ordered exporters to convert half of their foreign exchange earnings kept in bank accounts into Indian rupee. Today, the start is likely to remain somber as there is no positive cue to support the markets; even the global cues are sluggish. The sentiments are likely to weigh down on ministerial panel’s further deferral of long overdue legislations related to insurance, coal and competition law. However, the government cleared the Microfinance Bill. It has made the Reserve Bank of India as the regulator for all micro finance companies (MFIs). The impact of the decision will be seen on the microfinance stocks. The power stocks too are likely to remain buzzing as the government has ordered Coal India to supply coal to all power plants getting commissioned within this fiscal even if they have not signed legally binding fuel supply agreements.

Apart from this, there will be lots of important result announcements. Balaji Telefilms, Dr Reddys Lab, Federal Bank, Indian Bank, Moser Baer, MTNL, Oracle Financials, Pentamedia Grap, Tanla Solutions, Thermax and Torrent Power are among the many to announce their numbers today.

The US markets made a bounce back on Thursday, though the end still remained mixed but the Wall Street took a breather from the eurozone worries as Greece took steps to form a new government. The US economic data also cooperated as weekly initial jobless claims held steady, the seasonally-adjusted jobless claims fell by 1,000 to 367,000.The Asian markets have mostly made a weak start. The Chinese market was marginally in red despite country’s inflation coming below the government’s target for a third month, giving room to the government to ease policy to stimulate an economy.

Back home, all hopes of a comeback rally for the increasingly vulnerable Indian stock markets got shattered in Thursday’s trade session as many heavyweight stocks that saw short covering earlier in the day lost colossal ground in the second half. The benchmark equity indices buckled under the hefty across the board selling pressure exerted by market participants, leading the frontline indices to undo all the good work done in early part of the session. The benchmark gauges drifted lower for the sixth time in last seven sessions and got even dragged close to the psychological 4,950 (Nifty) and 16,400 (Sensex) levels in the session. The domestic bourses were once again tormented by global developments as investors fretted over unrelenting Euro-zone worries, which prompted them to take profits off the table amid little signs of any supportive leads. Sentiments went awry since early afternoon trades tracking gloomy developments from Europe where French industrial output fell more sharply than expected in March, adding to signs that the region’s onerous debt trouble is having its toll on the economy. Position squaring also gathered greater momentum as investors turned apprehensive about global growth prospects after weaker than expected Chinese trade data stoking fears of slowing global growth machine. Back home, sentiments were firmly supported by the encouraging cues from money market in first half as rupee recovered by 0.53% to 53.535 against the US dollar after the Reserve Bank tightened norms for utilization of the foreign currency fixed deposit funds to check outflow of forex. Marketmen showed unrelenting selling pressure on the Metal counters, which plunged over a percent being the top laggard in BSE’s sectoral space. The rate sensitive Auto index too plunged around a percent after industry body SIAM released data showing passenger car sales in India witnessed slowest growth during April in 10 years at 3.4% as customer sentiment remained low due to post-Budget price hikes and high interest rates, affecting the entry-level segment most. Finally, the BSE Sensex lost 59.53 points or 0.36% to settle at 16,420.05, while the S&P CNX Nifty declined by 9.10 points or 0.18% to close at 4,965.70.