Markets to get a cautious start tailing Asian peers

The Indian markets continued their somber start and suffered cut of another around a quarter percent. Today, the start is likely to remain cautious following the muted trend seen in other regional markets. Intermittent profit booking too is likely to persist lacking any supportive cues. Meanwhile, a report has indicated that the economy is ‘delicately’ balanced and to return to a higher growth trajectory, it needs strong policy reforms. There will be some buzz in the export oriented stocks, as it has been reported that the new Foreign Trade Policy will focus on ways to boost India's exports and reduce dependence on imports. Metal stocks may see some gains with the International Monetary Fund raising its economic growth forecast for China. However, there will be some concern in the mining stocks on report that the Supreme Court on Monday hinted at a Goa-like mining ban in Odisha for a period of three months to allow the state government to sort out illegalities in the mining sector and grant fresh leases. Oil and gas stocks too may see some action, as the government has ruled that gas extracted from coal seams will be priced at equivalent to conventional gas and not at rates triple the current gas price of $ 4.2. There will be lots of important result announcements to keep the markets ticking. Alstom T&D, BASF India, Bharti Airtel, Ceat, Dabur India, Hexaware Tech, IFCI, IOB, Jindal Steel, SSLT, TVS Motor, Thomas Cook and Welcorp are among many to announce their numbers today. The US markets closed mostly higher in last session, though the upbeat corporate and economic news effect was weighed down by lingering worries about Ukraine. The Asian markets too have made a cautious start eyeing the development in Ukraine, where United States slapped sanctions on seven Russian government officials and 17 companies linked to Russian President Vladimir Putin. Back home, extending their last session’s southward journey, Indian equity benchmarks ended the choppy day of trade with cut of over quarter a percent, as funds and retail investors opted to book profit at higher levels amid forecast of below normal rains and on renewed worries over Ukraine crisis. Domestic bourses made a cautious start and traded mostly in the red throughout the session, though barometer gauges for couple of times managed to bounce-back into positive terrain, but every attempt of recovery was reciprocated by profit-booking, triggered by the India Meteorological Department (IMD), announcement that the country will likely get below-normal levels of monsoon rain this year. Further, uncertainty over 2014 Lok-Sabha election outcome despite opinion polls indicating victory for the BJP-led NDA government, weighed on market sentiment. Investors also remained pessimistic on report that foreign direct investment (FDI) in India dipped modestly 0.6 percent to $20.76 billion from $20.89 billion recorded in the corresponding period of FY13. Though, FDI grew by 12.29 percent to $2.01 billion in the month of February, as compared to $1.79 billion in the same month of previous year. However, some support to the markets came from Finance Minister P Chidambaram’s statement that Indian economy will strengthen in future on the back of recent measures taken by the government. The CAD will be brought down significantly to around $32 billion as compared to record high of $88.2 billion or 4.8% of GDP in FY13. Finance Minister added that CAD has not only been fully and safely financed but $ 28.5 billion has also been added to the reserves during the previous fiscal year. On the global front, Asian shares ended mostly in the red due to rising tensions in Ukraine, however European counters traded higher in early deals. Back home, investors remained cautious after Indian rupee fell to 60.68/69 per dollar mark at the time of equity markets closing as compared to its Friday’s close of 60.60/61 on the back of month-end dollar demand from oil importers. Meanwhile, capital goods segment witnessed sharp sell-off led by selling in capital goods majors BHEL and Larsen & Toubro, which ended down 1.5-2% each as investors booked profit after recent gains. Finally, the BSE Sensex ended lower by 56.46 points or 0.25%, to 22631.61, while the CNX Nifty declined by 21.50 points or 0.32% to 6,761.25.