The Indian markets wilted under selling pressure in the last session, there were no support from either the global or domestic fronts. Today, the start is likely to remain cautious and traders will be eyeing the monthly inflation data. Though, there is expectation that Wholesale Price Inflation (WPI) for January may have dipped below the psychological 7 percent mark and could give a reason to RBI to lower its key policy rates. C Rangarajan, Chairman, Prime Minister’s Economic Advisory Council too has expressed hope that WPI could fall to 6.5 percent by March. However, RBI will also be considering high level of current account deficit, which is set to exceed last year’s number. The exporters will remain cautious, as the commerce ministry has said that it would wait for the trade data for March before announcing the annual supplement of the foreign trade policy (FTP), likely to include steps to boost exports. The telecom sector stocks are likely to be under pressure after the government said that the country’s five leading telecom operators understated revenue by nearly Rs 11,000 crore during two financial years and have been asked to pay additional licence fees. While, there is good news for the oil & gas sector, as the Planning Commission Deputy Chairman Montek Singh Ahluwalia has expressed the hope that the Cabinet Committee on Investment will clear some oil exploration projects in the next two weeks.
The US markets made modest gains on Wednesday, with Dow making its first record nine straight days’ gains since November 1996. Traders took support from the strong jump in retail sales in February. The Asian markets are still looking in a somber mood and barring few most of them have made a soft start. The Chinese market has moved up marginally despite concern that policy makers will expand efforts to cool the housing market. Seoul market was the biggest loser, as the Bank of Korea left the benchmark interest rate unchanged as a new government considers more fiscal support.
Back home, Indian stock markets continued their southward journey and completed a hat-trick of negative close ahead of WPI inflation numbers to be announced tomorrow. Selling got intensified after Morgan Stanley and HSBC each cut their India’s economic growth forecasts for 2013-14 to 6% from 6.2% to reflect lower-than-expected growth in the October-December quarter. Further, HSBC expects 50 basis points of additional rate cut in the calendar year 2013, and a slightly more protracted recovery in India. However, some consolidation was witnessed near 19,450 (Sensex) and 5,880 (Nifty) levels on Prime Minister Manmohan Singh’s statement that the economy will return back to a high growth trajectory within the next 2-3 years. He also said that the GDP has slowed down in the last couple of years owing to several domestic as well as international factors. But, selling resumed after nervous market participants resorted to ruthless across the board profit booking, following the disappointing start of European stock markets, weighed down by a string of weak earnings reports. Back home, selling in banking stocks too dampened the sentiments as stocks like ICICI Bank, HDFC Bank, SBI, Axis Bank, Indusind Bank, Bank of Baroda and Yes Bank all edged lower after higher-than-expected industrial growth in January and retail inflation remaining in double digits for the third straight month diminished hopes of a rate cut by the central bank. Shares of Consumer Durables counter also got offloaded after high inflation for the past few months has led to lower spends on consumer durables. Sentiments also got dented as shares of public sector oil marketing companies like BPCL, HPCL and IOC edged lower as US crude oil futures traded near the highest level in 2 weeks after an industry report showed crude stockpiles fell for the first time in a month in the US, the world’s biggest oil user. Additionally, shares of software exporters tumbled on account of appreciating rupee against the US dollar as most of these companies earn a major portion of their revenue from exports to the US. Finally, the BSE Sensex lost 202.37 points or 1.03% to settle at 19,362.55, while the CNX Nifty declined by 62.90 points or 1.06% to end at 5,851.20.