Indian markets will remain subdued & fall further on negative global cues !!!

Indian markets will remain subdued & fall further on negative global cues like US Consumer spending fell the most in almost three decades & Initial jobless claims rose to 586,000, the most since November 1982. The quarterly and year endings will keep the selling pressure on the market. Support for Nifty is seen between 2,780-2,280 levels.

Investor sentiment is fragile after the sharp dip in advance tax figures for the December quarter, but this mood could reverse if policymakers surprise the market with aggressive steps to stimulate the economy amid a global recession. While the government appears set to announce its second fiscal stimulus package soon, the central bank is expected to cut interest rates further to ease the ongoing liquidity crunch and bolster lending.

But the positive impact of these policy moves on sentiment could be short-lived, as investors have bigger issues to grapple with. Investors are gearing up for some disappointments in India Inc’s earnings for the October-December quarter, going by the trend in advance tax figures during the period, which are showing a dip of 22%. Companies will start announcing third-quarter results in about 10 days.

The quarter’s performance is considered crucial for investment decisions of investors, including foreign institutions, in Indian companies. Though several companies may report a decline in input costs this quarter, thanks to the sharp decline in commodity prices, analysts said that there are serious concerns over the impact of business slowdown on sales and profits.