Indian Markets settle lower for 4th consecutive week - Microsec

Indian equity markets settled lower for the fourth consecutive week as investors remained cautious ahead of Budget. The sentiment was dampened due to weak global markets on renewed concerns the US Federal Reserve may consider policy-tightening, which will reduce global liquidity. Metal, FMCG and Bankex dropped the most in the sectoral indices.

On domestic front, Planning Commission Deputy Chairman viewed that the Indian economy likely to grow@5-5.5% in the current fiscal and could grow by 7% in 2013-14.

On global front, According to the minutes of the U.S. FOMC January meeting, "many" officials are concerned about the costs and risks of further asset purchases, as the Fed buys securities at a pace of USD85bn a month. Launching QE3 last September, FOMC said it would keep buying assets until there was substantial improvement in the labour market. The goal of asset purchases is to boost the economy by driving down long-term interest rates. But according to the minutes, "a number of participants stated that an ongoing evaluation of the efficacy, costs and risks of asset purchases might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labour market had occurred". The risks that are starting to worry Fed officials include difficulties when they eventually come to sell assets, undermining financial stability, the functioning of financial markets and the possibility of capital losses when interest rates rise.

The U.K. lost its top credit rating by Moody's Investors Service, which cited weakness in the growth outlook and challenges to the Government's fiscal consolidation program. The rating on the U.K. was lowered one level to Aa1 from Aaa.

Source : Equity Bulls

Keywords