EQUITY OPENING BELL

Markets to get a weak start and remain cautious; may recover in late trade

The Indian markets witnessed a blood bath in last session, when major indices plunged to their new lows of the year, it was the biggest fall for the markets in more than six months as traders across the globe panicked about further plan of the US Federal Reserve over how much longer it would stick to its stimulus measures. Today, the start is likely to remain cautious, there will be some concern in the markets after the twin bomb blast in Hyderabad. However, there is likely to be some recovery in the late trades  and marketmen will go for some value buying at lower levels. President Pranab Mukherjee, addressing the joint sitting of the two Houses of Parliament has said that Inflation is easing gradually, but is still a problem and has expressed his hopes of recovery in economic growth. Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that to create more jobs, India needs an eco-system that encourages more and more mid-level enterprises.IT sector may get a boost with Gartners' report that heatlthcare providers' spending on IT will increase by seven percent this year. Commodities stocks will be watched on global reactions, while the PSU oil marketing companies are likely to get some support with plunge in crude prices.

The US markets extended their declining trend on Thursday, though there was some recovery in the late trade but traders continued cashing in on the recent strength in the markets and were concerned after Labor Department's report showing that initial jobless claims climbed to 362,000 in the week ended February 16. Most of the Asian markets have made a weak start on concern that China will take more steps to control economic growth and as the reports showed deepening recession in euro zone.

Back home, Indian markets witnessed butchery on Thursday with both the major indices losing over one and half a percent and closed near their lowest level in almost eight and a half weeks, breaching major crucial support levels, 19,400 (Sensex) and 5,900 (Nifty) on feeble global cues. A gap-down start of markets 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 consumer durables, none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include Metal, Banking and Realty. Major reason behind the blood bath was sluggish global cues as European markets made a lethargic start after minutes from the US Federal Reserve's latest meeting illustrated different views over the bank's monetary-easing program. Back home, markets also remained jittery as the crucial Budget session of Parliament began today with the United Progressive Alliance (UPA) government set to face a stiff challenge because of the controversies surrounding the chopper deal. Metal shares like Jindal Steel, Tata Steel, Sterlite Industries and Hindalco melted between 3-5 per cent on news that the commodity prices have declined globally. Some pressure also came in after realty stocks tumbled as tussle over legislation to set up a real estate watchdog, pending since 2009, intensified after private developers rejected the proposal. Sentiments also remained under pressure as financial shares like ICICI Bank, SBI, HDFC Bank and HDFC all edged lower in the trade after RBI data showed that the sector's loan growth continues to be a concern. Moreover, RBI data showed banks registered an 8.7 per cent growth in advances this fiscal year, compared to 11.2 per cent in the previous year. Meanwhile, banks and financial institutions remained closed on the second day of two-day nationwide bandh called by major trade unions to protest against the anti-labour policies of the government. Shares of cigarette makers like VST Industries, Godfrey Phillips India and ITC also tumbled after the Gujarat state government proposed to increase the value-added tax on cigarettes. Finally, the BSE Sensex shaved off 317.39 points or 1.62% to settle at 19,325.36, while the CNX Nifty plunged by 90.80 points or 1.53% to end at 5,852.25.