Markets to extend their somberness with a soft start

The Indian markets continued their southbound journey and ended with modest cuts in last session, before going for a holiday. Today, the start is likely to remain soft with traders reacting to the weak core sector data. The index of eight core industries slowed to 2.5 per cent in March from 7 percent recorded in the same month a year ago, as output of crude oil, natural gas and fertiliser declined. Auto companies too have came up with disappointing sales data for the month of April and will weigh on the sentiments of the marketmen. Also, Rating agency, ICRA in its latest report expects an extended pause on Reserve Bank of India's policy rates, with monetary easing getting stretched until at least early-2015. It has stated that it may dampen any early revival in the other sectors of the economy as well and the sticky rates would limit improvements in consumption demand. However, the ailing aviation stocks may get some relief, as the Aviation Turbine Fuel (ATF) prices were slashed by about 1%. This is the second reduction in the ATF, since the beginning of the year, after a 4% reduction in April. There will be lots of important result announcements to keep the markets buzzing. 3I Infotech, Godrej Properties, Grasim Inds, Heidelberg Cement, HCC, Pfizer, Reliance Comm, Reliance Cap etc. are the important companies to announce their numbers today. The US markets made mostly negative closing in last session and traders opted to remain on sidelines ahead of the release of April's jobs report on Friday, overlooking a positive batch of economic indicators. Also, as the Fed continued its tapering and kept the rates unchanged. The Asian markets have made a mixed start and some of the indices are trading in red waiting for the US payrolls report and while China’s markets are closed, others remained subdued. Back home, Indian equity benchmarks extended their southward journey for fourth consecutive session and ended the volatile day of trade slightly in the red. Domestic bourses kick-started the session on a strong note but were unable to hold the gains, as investors booked profit at higher levels. Though, some recovery was witnessed in dying hour of trade but proved too little to bring back markets into the green. Earlier, markets made a gap-up start on the back of strong global set-up. Some support came 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. Sentiments also got boost after World Bank’s report highlighted that India has replaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP). The World Bank's International Comparison Program (ICP) 2014 reported India's share in World GDP at 6.4% to $5.75 trillion in 2011 compared with China's at 14.9% and the US at 17.1%. Appreciation in Indian rupee too supported the sentiments with rupee rising to its highest in more than a week on heavy dollar selling by exporters and corporates. Supportive cues from US and Asian markets too provided some support to local bourses, however, disappointing cues from European market took their toll on domestic sentiments in late trade. Back home, sentiments also remained dampened due to both, domestic poll-related and global geo-political worries. Meanwhile, selling was witnessed in metal stocks on reports the Chinese Academy of Social Sciences (CASS), one of Beijing’s top government think tanks, has revised its 2014 GDP growth forecast down to 7.4%, below the official 7.5% target, and said that growth could slow to as low as 7%. Stocks related to telecom sector too tumbled during the trade, led by Bharti Airtel which fell over 2% fall despite reporting 89% year-on-year jump in consolidated net profit at Rs 962 crore for the fourth quarter ended March 31, 2014 (Q4), backed by strong growth in voice and data revenues. Additionally, shares of real estate companies succumbed to selling pressure, tumbling by up to 11% in late noon deals. Finally, the BSE Sensex declined by 48.39 points or 0.22%, to 22417.80, while the CNX Nifty was down by 18.85 points or 0.28% to 6,696.40. Indian markets remained closed on Thursday on account of a local holiday.