Markets likely to get a flat-to-cautious start

The Indian markets declined further in last session as the rupee slumped to fresh lows, breaching 56 per dollar mark, selling continued throughout the day, lacking any positive trigger. Today, the start is likely to be cautious and markets will be seen reacting to the government’s decision of a steep hike in petrol prices. Though, the bold decision of the government may give a reason to rejoice to the oil marketing companies but on the same time the auto stocks are likely to see sharp decline. On economy front too, the sharp increase in petrol prices will have a marginal impact as inflation numbers will get impacted by any increase in diesel and cooking gas prices. Meanwhile, the telecom stocks too are likely to keep buzzing as the government is all set to pave the way for an end to mobile roaming within the country which will impact the revenue of the telcos. The government will be soon be discussing the New Telecom Policy, which will replace a 13-year-old statement, along with a unified licence regime for all telecom services.

Also, there will be lots of result announcements to keep the markets buzzing. Central Bank, Gujarat Alkali, GSPL, Jai Corp, Jet Air India, Madras Cements, Max India, Novartis India, Pidilite Inds, Reliance Power, TVS Motor and Voltas are among the many to announce their numbers today.

The US markets made a remarkable comeback in last hours, though could not manage an all green close and Dow despite recovering over 200 points closed marginally in red. The news that every euro-zone member will have to prepare a contingency plan in case of Greece exit from the single currency bloc helped the markets to revive. The Asian markets have made a mixed start with some of the indices trading lower by a quarter percent, though the mood remains cautious awaiting the outcome of a summit in Brussels at which European leaders are talking about the way to fight the region's debt crisis.

Back home, Indian equity markets snapped the lackluster Wednesday with a cut of about another half a percent. The day that started on a sluggish note under impression of weakness in the other global markets, never looked confident, as the domestic currency slumped to fresh all time low, breaching 56 per dollar mark. Rupee, which made a weak start made some recovery as RBI reportedly sold dollars at the rate of 55.75 through PSU banks, but wilted under the importers heavy demand of dollar. Currency traders remained reluctant to be more aggressive against such a sharp decline in the rupee. The RBI too seemed to have refrained from heavy dollar selling considering the situation a global risk aversion. Domestic markets, though in red continued their range-bound trade till noon but once the rupee lost its direction despite some reported RBI intervention, the stocks followed the trend and slipped to their lows of the day. However, there was some recovery attempt, supported by the gains in some banking stocks, but they too gave up under pressure and markets by the end closed lower by half a percent. On the sectoral front, Consumer Durables (CD) along with Capital Goods (CG) and Realty suffered the most, while the metal sectors stocks too lost about a percent tailing their global peers. There was speculation that government could raise fuel prices following the sharp depreciation in rupee, the buzz helped the PSU oil marketing companies to some extent but made adverse impact on the auto stocks. Tata Motors lost 1.19% and Maruti Suzuki was down by 0.17%. IT sector that got some advantage of depreciating rupee and the defensive healthcare sector, could only manage a green close and that too marginally, otherwise all the sectoral gauges closed in red. There were some stock specific actions based on result announcements and some individual reasons. A2Z Maintenance and Engineering Services rallied and closed with gains of over 5 percent after the report that Rakesh Jhunjhunwala and his wife bought shares worth Rs 26.5 crore of the company. While, GAIL (India) gained over 3 percent after signing the gas sale and purchase agreement (GSPA) with TurkmenGaz, Turkmenistan’s national oil company, for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline Project. Finally, the BSE Sensex lost 78.31 points or 0.49% to settle at 15,948.10, while the S&P CNX Nifty declined by 24.85 points or 0.51% to close at 4,835.65.