Markets to get some recovery with a positive start

The Indian markets declined further and major indices witnessed cut of over half a percent on profit booking and some disappointing earnings announcements in last session. Today, the start is likely to be in green and markets may get some recovery after their continuous drubbing. Traders will be getting some support with an Assocham CEO survey of which around 50 per cent of Indian CEOs said they are optimistic about the Indian economy, and expect it to be stronger in the next six months. Though, there will be some concerns as well, the global credit ratings agency Crisil has said that government’s efforts to narrow fiscal deficit since last two years by expenditure cuts has resulted in lower productive spending, and the new government would find it challenging to give it a boost. Meanwhile, Prime Minister Manmohan Singh will meet the full-time members of the Planning Commission to take stock of the economy and progress of development works undertaken during the UPA regime. Mobile operators will keep buzzing, as they will be able to offer 3G services across the country, with the telecom tribunal holding their roaming pacts to be valid. There will be lots of result announcements too, to keep the market momentum going. Arss Infra Projects, Everest Inds, IDBI Bank, JSW Energy, Kansai Nerolac, Marico, Merck, Oriental Bank, Petronet LNG, Sterlite Tech and Walchandnagar are among many to announce their numbers. The US markets strengthened in last session on the back of some upbeat earnings announcements; however there was weak consumer confidence data that capped the further gains of the market. Asian markets have mostly made a positive start ahead of the Bank of Japan and Federal Reserve report on monetary policy. Back home, extending their southward journey for third consecutive session, Indian equity benchmarks ended the Tuesday’s trade near day’s lows on geo-political tension over Ukraine. Selling was both brutal and wide-based as, barring consumer durables; none of sectoral indices on BSE could manage a green close. Counters, which featured in the list of worst performers, were metal, banking, auto and power. After getting a promising start, frontline gauges slipped into negative terrain, as markets participants turned cautious on report that foreign investors sold index futures worth Rs 1170 crore over the previous two sessions. Selling got intensified in last leg of trade as investors remained pessimistic on India Meteorological Department’s (IMD) announcement that the country will likely get below-normal levels of monsoon rain this year. Moreover, the Reserve Bank of India has warned that El Nino can impact the yield, which could further trigger the inflation rate above 8.5 per cent and may result in hiking rates further. On the global front, European markets made a positive start, while the Asian markets shut shop mostly in the green. Back home, mining stocks remained under pressure during the trade on report that the Supreme Court may go for 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.  Additionally, Railway stocks such as Titagarh Wagons, Kalindee Rail Nirman and Kernex Microsystems plunged by over 10% due to profit-booking. Railway stocks had witnessed a sharp run-up in the past few trading sessions on expectations that these companies would bag orders from the new government. On the flip side, telecom stocks grabbed some limelight after the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) cleared the 3G intra-circle roaming agreements signed between Bharti Airtel, Vodafone India and Idea Cellular, saying the pacts didn't violate any license conditions and also quashed the penalties levied on the three operators by the telecom department (DoT). Finally, the BSE Sensex plunged by 165.42 points or 0.73%, to 22466.19, while the CNX Nifty declined by 46.00 points or 0.68% to 6,715.25.