Markets to get a soft-to-cautious start on weak global cues

The Indian markets remained in consolidation mood, though managed another positive close in last session. Today, the start is likely to be a bit soft-to-cautious tailing weak global cues. However, traders may get some support with Reserve Bank of India (RBI) Governor Raghuram Rajan expressing optimism on India’s growth rate going beyond the 5 percent mark soon.  Rajan has also expressed confidence that whichever government takes over, will lay a clear path to revive growth. Also, there is another news from the economy front that could cheer the markets, Paris-based think-tank, Organisation for Economic Cooperation and Development (OECD) in its estimates for 2014 has said that India's economic growth is poised to inch up 4.9 percent in 2014 and is expected to gain momentum with a decline in “political uncertainty” after the general elections. There will be some buzz in the steel stocks on a report that India's steel consumption grew by 3.4 percent to 5.8 million tonnes in April 2014 over the same month a year ago. There will be lots of important result announcements too, to keep the markets ticking. Aditya Birla Chemicals, Allahabad Bank, Hindustan Media, Kajaria Cermics, Lupin, Procter & Gamble and Syndicate Bank will be among many to announce their numbers. The US markets once again turned lower in last session, offsetting the modest gains posted in the previous session. While traders remained concerned about the crisis in Ukraine amid reports of continued clashes between Ukrainian armed forces and pro-Russian militants, there were some weak earnings that pressured the markets. The Asian markets have made mostly a soft start after the report that China’s services industry expanded at a slower pace in April, also the strength in yen against the dollar was pulling the Japanese market down. Back home, Indian markets witnessed another day of positive close, their second successive one after a week of continued downbeat movement. Traders once again harped on the election result outcome and went for some value buying at lower levels. However, the markets were not very confident and trade remained rangebound with low volumes and after early gains bourses slipped lower and again made a recovery attempt in the final hours of trade. Rupee volatility too weighed on the sentiments and restricted the gains of the markets. Though, there was not much from the global markets, as the US markets after a volatile trade managed a close of modest gains, while the Asian markets lacked any major action as some of the indices in the region remained closed and others showed lackluster performance, the European markets too made a soft start. Back home, the local markets remained in a tight range throughout the day and traders mood pessimistic, lacking any major cue. There was some early gains on C Rangarajan, Chairman, Prime Minister’s Economic Advisory Council (PMEAC) statement that the country’s current account deficit (CAD) is expected to be around 2 per cent of the GDP in the coming few years. Further, the HSBC services business activity index inched up from 47.5 in March to 48.5 in April. While, Composite Output Index, which maps both services and manufacturing, increased from 48.9 in March to 49.5 in April, but remained below the crucial 50 mark. Private sector output in India fell for the second consecutive month in April, as manufacturing production rose at a softer rate and service sector output declined further. Meanwhile, result reactions kept the markets buzzing, HDFC came up with inline expectation numbers and posted a net profit of Rs 1723 crore in the quarter ended March 31, up 11 percent from Rs 1555 crore in the year ago period, however, its net interest income (NII) was below estimates. On the other hand, Vijaya Bank’s net profit fell by 39.39% to Rs 135.84 crore for the quarter ended March 31, 2014. Back on street, on the sectoral front most of the indices ended higher, Consumer Durables gauge surged by over 3%, while some somberness was witnessed in IT, Tech and power sector stocks. Broader indices too showed some choppy move but maintained their gains till last. Finally, the BSE Sensex gained 63.30 points or 0.28%, to 22508.42, while the CNX Nifty added 15.95 points or 0.24% to 6,715.30.