Indian markets opened in the negative due to weak global cues, especially from the eurozone, resulting in global risk-off trade.
Cyprus, an island country east of Greece is in the headlines for the wrong reasons. Cyprus is almost forced to agree to Euro zone leaders on taxing depositors up to 10 percent – 6.7% on amounts below 100,000 euros and 9.9 % on figures above that – to raise 5.8bn euros to enable Cyprus be eligible for an international bailout. Fears are a bank-run could take place in other regions too. Asian markets too are weak. The Nikkei is down around 2% while South Korea’s Kospi Index is half a percent lower. Hong Kong’s Hang Seng Index fell 1.6% while the Shanghai Composite Index is down 0.4%.
While the Sensex opened 160 points lower at 19263, the Nifty was down 48 points at 5824.
BSE metals and banking indexes are weak in opening trade.
ICICI Bank shares are down around 2 percent, SBI fell 0.7 percent as the banking space looks weak overall.
Stock markets are also likely to see range-bound trading this week in view of RBI’s monetary policy review on Tuesday, with analysts widely expecting the central bank to cut interest rates by 0.25 percent.
“It was quite a volatile week for the Indian markets that saw Sensex dropping most in two weeks before rising again on back of rate cut hopes. RBI’s policy review is likely to decide directions for the markets this week and expect
range-bound movement ahead of the policy,” said Aditya Trading Solutions (ATS) Founder Vikas Jain.
A 25 basis points cut may not surprise the market, while a 50 bps may infuse a new lease of life into bulls, he added.
In case of manufactured goods, inflation moderated to 4.51 per cent in February, compared to 5.82 per cent in the same month previous fiscal making case for easing of the monetary policy by RBI in its mid-quarter review on March 19. However, overall inflation increased marginally to 6.84 percent in February driven by costlier food items and petrol.
“This week, 5,925 shall be crucial deciding level in near term for Nifty and the index is likely to witness further buying above this level,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Meanwhile, advance tax numbers are reportedly higher than the previous year. Investors tend to associate the same with better performance by corporate India. Reports state that the target of collecting Rs.1.78 lakh crore corporate tax from Mumbai in 2012-13, a 13% growth over the previous year, seems achievable.
Following the Cobrapost sting operation, ICICI Bank has suspended 18 employees. HDFC Bank appointed Deloitte Touche Tohmatsu India to carry out an independent forensic enquiry into allegations of some of its officials facilitating money laundering activities. sAxis Bank has said it has systems and processes that are robust and fully compliant with extant regulations. The market will keep a close watch on the developments in the money laundering issue.
With PTI inputs