Markets cautious ahead of Q3 numbers, US jobs data

BSE Sensex declined 0.08% to end day at 20,713.37 while NSE Nifty fell 0.1% to close at 6,168.35

Shares declined on Thursday for the seventh straight session this year as investors remained cautious ahead of the third quarter (Q3) earnings season and the release of US employment data on Friday. However, stocks remained immune to the minutes of the US Federal Reserve’s December meeting, released by the American central bank on Wednesday.

Trading remained choppy, with stocks of the realty, capital goods and banking sectors declining. Nervous investors dumped blue chips like Larsen & Toubro, Axis Bank and Hindalco, among others, ahead of the earnings numbers and the inflation as well as production data to be released.

The BSE Sensex declined 0.08 per cent to end the day at 20,713.37, while the NSE Nifty fell 0.1 per cent to close at 6,168.35.

Analysts said the minutes of the US Federal Open Market Committee meeting had a weak impact on markets across the globe, as it was largely on expected lines.

“Markets are now looking forward to the US jobs data that will be released on Friday. If the data shows improvement that would indicate recovery in the US economy and, therefore, faster tapering of the stimulus programme,” said Sunil Jain, vice-president, equity research, Nirmal Bang Securities.

At the end of its December meeting, the US Fed had announced a $10-billion cut in its bond-buying programme known as third quantitative easing (QE3). But with officials seeing diminishing role for QE3 in the improvement of the US economy, analysts said the tapering could be ended earlier than was expected.The improvement in the US economy has already started reflecting in strengthening of the dollar.

A depreciating rupee would keep markets nervous, except for stocks in export-oriented sectors like technology, health care and textile, among others. The rupee ended the day on Thursday  at 62.07 against the dollar, little changed from its previous close. During the day, it rose to 61.96, the strongest seen since January 2.

But analysts said most of the positives on that currency front for these stocks had already been accounted for by the markets and might not lead to sharp price rises.  Technology giant, Infosys, which announces its Q3 results on Friday, is not expected to see higher gains from these levels.

On Thursday, foreign institutions were net sellers of equities at Rs 3.74 crore, from provisional data on the exchanges. Domestic institutions were net sellers as well, having sold shares worth Rs 118 crore.