Markets Set for A Cautious Start

Today is the last trading session of the Samvat 2075 and market participants would wish to bid adieu to it on a high note. However, all hopes to end this year with an explosive trading session seem quashed with the likely cautious opening of the market this morning, thanks to India’s growth being slashed by Fitch to 5.5 per cent for the current fiscal. The projection is lower than 6.1 per cent estimation, given by the RBI. During the Samvat 2075, Nifty has delivered a return of about 10 per cent, far better figure than the one delivered in Samvat 2074. But the question is, were investors on D-street smiling? To be honest, the answer is a big no. Investors witnessed a pall of gloom as the breadth of the market remained narrow and returns delivered by the broader indices, like Nifty Mid cap and Small cap were negative, wherein, both the indices lost about 7 and 10 per cent, respectively. Many stocks were down and out while some saw an erosion of more than 50 per cent. Now, the focus shifts to the ‘Muhurat’ trading on Sunday, which will usher in the new Samvat year. As I write this, SGX Nifty is down by 32 points at levels of 11,583. On the earning front, HDFC AMC, Marico, State Bank of India, and Tata Motors are some of the key names, which will declare their quarterly results today.

In the Asian markets, except for Japan’s Nikkei 225, which is hovering around the neutral line, every single market is in the red, this morning. Followed by China’s Shanghai Composite, Hong Kong’s Hang Seng is the worst performer so far.

Back home, Jack and Jill, the protagonists from one of the famous nursery rhymes, seem to come alive for what happened in the markets on Thursday. Key benchmark indices went up the hill initially but failed to capitalize on initial gains and, as the session progressed, they came tumbling down to end the day with losses. Blame it on the state elections outcome, wherein the ruling party, BJP, although managed to retain its power in Maharashtra, struggled hard to reach the majority mark of 46 seats in Haryana. Further, the Supreme Court’s verdict against telecom companies in AGR added fuel to fire. At the end of the day, Nifty dropped 0.19 per cent to end below 11,600 mark and BSE Sensex dipped 0.10 per cent to finish at 39,020. In the broader market, Nifty Midcap and Small cap closed with a loss of 0.32 and 0.47 per cent, respectively. Amongst the sectoral indices, barring Nifty Realty, all other indices were under pressure, with Nifty PSU Bank surfacing as the top loser.

Globally, the US markets ended Thursday’s session on a mixed note, with tech stocks contributing to a notable advance by the NASDAQ but the Dow and the S&P 500 lacking clear directions. The tech-heavy NASDAQ Composite was aided by the solid performance of Microsoft while a steep drop in the share price of 3M resulted in the Dow being in pressure. On the economic front, the news flow was not encouraging, as jobless claim came in lower than forecasts and durable goods orders fell more than expected. At the close of trade, the Dow ended marginally lower while S&P was up 0.2 per cent and NASDAQ surged 0.8 per cent. Meantime, the European equities finished higher, as ECB President, Mario Draghi, wrapped up his final monetary policy meeting as the head of the central bank by leaving the interest rate unchanged.