The Indian markets seem to have sensed the global rout in advance and returned to its declining path in last session after a small pause. Today, the start is likely to be a gap-down one taking cues from the global markets, though some recovery can be seen in latter trade and markets may stabilize after the continuous fall. Traders will be concerned as the global credit rating agency and consulting firm Fitch on Monday called on the top brass of the Finance Ministry and raised concerns about country’s fiscal deficit. However, Department of Economic Affairs Secretary Arvind Mayaram has said that the agency representatives were satisfied with the country’s overall macroeconomic situation and Ministry officials reiterated government’s commitment to contain fiscal deficit at 4.8 per cent of GDP. The buzz will continue in the telecom sector, as telecom firms have together put in bids of around Rs 42,000 crore on the first day of 2G spectrum auctions, giving respite to the government who had targeted Rs 40,874.50 crore from auctions and other charges. Aviation stocks too are likely to see some action, as ATF prices have been cut by about 3 percent on softening international oil rates, the first reduction in two months.
There will be some important result announcements to keep the markets buzzing. Ajcon Global, BEML, Bharat Forge, Cummins India, Godfrey Phillips, Power Finance, Singer India, SBBJ, Suven Life, Tech Mahindra and Whirlpool are among the many to announce their numbers today.
The US markets slumped on Monday on getting unexpectedly weak manufacturing data, all the major indices were down by over two percent and raised concerns that the Federal Reserve may have been begun scaling back its stimulus program too soon. Most of the Asian markets have made a weak start mirroring the plunge in the US markets and while some of the markets are still closed for the day, Japanese market was leading the losers pack with cut of around two and half a percent.
Back home, the new week commenced on a scary note for the frontline indices which suffered a brutal laceration of around one and half a percentage points. Indian barometer gauges, resuming their southward journey after a day of halt, witnessed blood bath and closed near their lowest level in more than ten weeks, breaching major crucial support levels 20,250 (Sensex) and 6,050 (Nifty) on feeble global cues. After a negative opening, the domestic bourses never looked in recovery mood and continued sliding till end, closing near the lowest point of the day. Selling was both brutal and wide-based, as barring healthcare none of sectoral indices on the BSE could manage a green close. Counters, which featured in the list of worst performers, include metal, realty and auto. The market sentiment was hit adversely as the government revised downwards the GDP growth estimates for the year ended March 31, 2013 (FY 2013) to 4.5% from 5% reported earlier. Sentiments also remained down-beat on report that fiscal deficit in the first three quarters of the current fiscal year ending March touched 95.2% of the budgeted target for the whole year at Rs 5.16 lakh crore as compared with 78.8% a year ago. Some pessimism came after CII survey too, showing that India’s economy is likely to grow in the range of 4.5 to 5% during the second half of the current fiscal. Selling got intensified after European markets made a poor start, resuming their sell-off of the past 10 days, Asian markets too ended lower. Back home, investors shrugged off good factory PMI data, the HSBC Purchasing Managers’ Index (PMI) rose to 51.4 in the month of January, highest since March, from 50.7 in the previous month. Manufacturing increased due to increase in new orders from India’s major export destinations of the United States and the euro zone over the past few months. However, selling aggravated when Oil Minister Veerappa Moily announced that CNG prices will be cut by about Rs 15 per kg and piped natural gas by about Rs 5 per cubic metres in Delhi. Selling in auto sector too dampened the sentiments, with stocks like Bajaj Auto, Ashok Leyland, M&M and Maruti Suzuki edging lower on reporting decline in January sales number. Finally, the BSE Sensex plunged by 304.59 points or 1.48%, to settle at 20209.26, while the CNX Nifty lost 87.70 points or 1.44% to settle at 6,001.80.
