Markets to get a mildly soft start of the new week

The Indian markets suffered sharp selling in last session after IMD predicted below normal June-September rains. Today, the start of another truncated week is likely to be mildly in red, tailing weak global cues and traders amid the weak monsoon reports are likely to turn more cautious on a private report saying that rural demand will continue to remain subdued for some time due to the deceleration in farm income. However, some recovery too can be expected as it has been estimated that amid hopes of a stable and reform oriented government after general elections,  net investments by foreign institutional investors into India has reached $10-billion level, while their cumulative total inflows into the  country is nearing $200-billion mark. There will be some buzz in power and mining stocks on reports that the Central Vigilance Commission (CVC) is likely to support CBI’s recommendation for closing about 20 preliminary enquiries (PEs) filed by the agency in connection with the multi-crore coal blocks allocation scam. Also, as the Goa Chief Minister Manohar Parrikar has said that the state government will formulate an iron ore mining policy in about two months. There will be lots of result reactions based on announcements made during the weekend along with lots of important ones today. Alembic Pharma, Bajaj Corp, Godrej Consumers, HUL. Idea Cellular, KPIT Cummins, Tata Sponge, SKS Microfinance and Wyeth will be reporting their numbers. The US markets declined in last session, snapping the weak on a soft note though the consumer sentiments improved but traders remained concerned about the ongoing earnings season and tension in Ukraine. The Asian markets have mostly made a soft start with some of the indices extending their losses for the third straight day amid prospects Russia will be subject to new sanctions as tensions over Ukraine has intensified. Back home, after scaling fresh all-time highs in the previous session, Indian equity benchmarks kick started the new Futures & Options (F&O) series on subdued note with frontline gauges ending below their crucial 22,700 (Sensex) and 6,800 (Nifty) levels amid escalating tensions in Ukraine, while result disappointment too weighed down sentiments. Investors’ mood also remained dampened sentiments also remained dampened after India Meteorological Department (IMD) has predicted below normal June-September rains at 95% of the long period average due to El Nino. IMD said there was a 56% probability of below normal to deficient rains, as compared to a 44% chance of rains being normal or better. Domestic bourses after a cautious start traded flat till late morning trade, but succumbed to profit taking in the second half of the session amid growth concerns. Selling got intensified after disappointment over earnings from market heavyweights -- ICICI Bank and Maruti Suzuki. Stock of ICICI Bank fell over two percent on reporting lower-than-expected bottom-line, though there was 15 percent rise in Q4 net, but it was helped by a one-time foreign exchange gain estimated at Rs 222 crore, while Maruti Suzuki reported a 35.5 percent fall in fourth-quarter net profit, missing estimates, as potential car buyers postponed their purchases and waited for a slowing economy to pick up. Global cues too remained sluggish as Asian stocks ended mostly lower after fears of an escalating Ukraine crisis offset upbeat US economic data. European counters too traded in negative territory in early deals. Back home, select pharma stocks witnessed selling on report that India’s pharmaceutical exports registered slowest growth in at least 15 years at 1.2 percent to $ 14.84 billion last fiscal. Finally, the BSE Sensex plunged by 188.47 points or 0.82%, to 22688.07, while the CNX Nifty declined by 58.05 points or 0.85% to 6,782.75.