The Indian markets breaking their three days gaining streak turned lower in last session on getting weak core sector data and traders opted to book profit after the recent rallies. Today, the start is likely to remain soft tailing the weakness in the global markets. Traders will also be concerned with the report that Foreign Direct Investment (FDI) into the country declined by about 38 percent, year-on-year, to $2.91 billion in September. However, industry body Assocham has said that narrowing of the current account deficit will help arrest depreciation of the rupee and ease inflation concerns and that may soothe some nerves. Meanwhile, Prime Minister Manmohan Singh has said that market-based pricing and technology are essential as India is expected to become world's third largest energy consumer in seven years. He also said that to bridge the gap between supply and demand, the government is encouraging domestic and global companies to explore onshore and offshore regions. There will be some buzz in investment and infrastructure companies, as the RBI has allowed core investment companies to raise external commercial borrowing (ECB) for projects floated as special purpose vehicle in order to strengthen the flow of resources into the infrastructure sector.
The US markets continued their weak trend on Tuesday on concern about the outlook for the Federal Reserve’s stimulus program and trade remained subdued with traders looking ahead to the release of a slew of data. The Asian markets outside China have made a soft start and some of the indices are down by over a percent with Japanese markets losing over two percent after the yen strengthened.
Back home, Indian equity benchmarks, snapping three days winning streak, ended the session slightly in the red on Tuesday with investors turning cautious after robust US manufacturing data yet again fuelled fears that the US Federal Reserve may scale back its stimulus sooner than anticipated. Markets exhibited lack luster trade during the day as sentiments remained dampened after the output of eight core sector industries contracted by 0.6 percent in October due to poor showing by coal, oil and gas sectors. The output of eight infrastructure industries in April-October was a mere 2.6 percent against 6.8 percent in the same period of the last fiscal. However, losses remain capped as some support came in from good economic data of trade deficit. India’s current-account deficit shrank to a four-year low to $5.2 billion or 1.2% of gross domestic product (GDP), in the September quarter, sharply lower from the $21 billion deficit recorded a year ago period. Meanwhile, Finance minister P Chidambaram said that the economy is expected to grow by 5% in 2013-14 and the fiscal and current account deficits would be contained. Meanwhile, global cues remained choppy with European markets trading lower in early deals, while most of the Asian equity benchmarks ended the session in the red. Back home, stocks related to auto space witnessed selling as after showing some signs of revival in September and October during the festive season, auto sales dipped again in November. Moreover, shares related to banking counter too hit rock bottom after RBI proposed increased capital requirements and intense regulation for ‘too big to fail’ kind of banks. Further, RBI also issued updated guidelines for stress-testing of banks which will be effective from April. Telecom stocks viz. Bharti Airtel, Idea Cellular and RCom too edged lower after EGoM meeting scheduled to discuss the much-awaited M&A guidelines in the telecom sector was reportedly postponed. Bucking the trend, metal stocks extended Monday’s gains triggered by data showing that manufacturing activity in China continued to grow last month. Moreover, capital goods stocks too edged higher led by L&T which gained after its construction division secured orders valued at Rs 1471 crore across various business segments in November and December 2013. Finally, the BSE Sensex lost 43.09 points or 0.21%, to settle at 20854.92, while the CNX Nifty declined by 16.00 points or 0.26% to settle at 6,201.85.
The US markets continued their weak trend on Tuesday on concern about the outlook for the Federal Reserve’s stimulus program and trade remained subdued with traders looking ahead to the release of a slew of data. The Asian markets outside China have made a soft start and some of the indices are down by over a percent with Japanese markets losing over two percent after the yen strengthened.
Back home, Indian equity benchmarks, snapping three days winning streak, ended the session slightly in the red on Tuesday with investors turning cautious after robust US manufacturing data yet again fuelled fears that the US Federal Reserve may scale back its stimulus sooner than anticipated. Markets exhibited lack luster trade during the day as sentiments remained dampened after the output of eight core sector industries contracted by 0.6 percent in October due to poor showing by coal, oil and gas sectors. The output of eight infrastructure industries in April-October was a mere 2.6 percent against 6.8 percent in the same period of the last fiscal. However, losses remain capped as some support came in from good economic data of trade deficit. India’s current-account deficit shrank to a four-year low to $5.2 billion or 1.2% of gross domestic product (GDP), in the September quarter, sharply lower from the $21 billion deficit recorded a year ago period. Meanwhile, Finance minister P Chidambaram said that the economy is expected to grow by 5% in 2013-14 and the fiscal and current account deficits would be contained. Meanwhile, global cues remained choppy with European markets trading lower in early deals, while most of the Asian equity benchmarks ended the session in the red. Back home, stocks related to auto space witnessed selling as after showing some signs of revival in September and October during the festive season, auto sales dipped again in November. Moreover, shares related to banking counter too hit rock bottom after RBI proposed increased capital requirements and intense regulation for ‘too big to fail’ kind of banks. Further, RBI also issued updated guidelines for stress-testing of banks which will be effective from April. Telecom stocks viz. Bharti Airtel, Idea Cellular and RCom too edged lower after EGoM meeting scheduled to discuss the much-awaited M&A guidelines in the telecom sector was reportedly postponed. Bucking the trend, metal stocks extended Monday’s gains triggered by data showing that manufacturing activity in China continued to grow last month. Moreover, capital goods stocks too edged higher led by L&T which gained after its construction division secured orders valued at Rs 1471 crore across various business segments in November and December 2013. Finally, the BSE Sensex lost 43.09 points or 0.21%, to settle at 20854.92, while the CNX Nifty declined by 16.00 points or 0.26% to settle at 6,201.85.
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