Markets to witness some profit taking after slew of rallies

The Indian markets bull run continued unabated and major indices scaled another record high in the last session. Traders even ignored the weak Services PMI data on the back of firm global cues. Today, the start is likely to be a bit soft-to-cautious tailing sluggishness in other global markets and some profit booking can be expected after a slew of rallies. Also, there is a report of World Economic Forum (WEF), which has ranked India among the worst-ranked countries when it comes to taxation and inflation burden on economy. As per the report, India ranks 133rd in terms of inflation, 130th for taxes and 131st for starting a business, while India has slipped to 71st position -- the lowest among BRICS countries, in global competitiveness list. Today, there will be some buzz in the banking sector stocks, as the Reserve Bank of India (RBI) has allowed non-resident foreign banks to offer debt to local companies in Indian rupees, a move that could increase competition among Indian banks facing poor credit off-take. There will be some action in realty stocks on report that government is now trying to fast-track a decision on easing rules for foreign investments in the construction development sector.

The US markets made another mixed closing in the last session, though there were some initial gains on easing geopolitical concerns, but traders seemed reluctant to continue buying stocks ahead of the European Central Bank's monetary policy announcement. The Asian markets have made mostly a negative start with many of the indices retreating from a one-month high before central banks in Japan and Europe decide monetary policy.

Back home, extending their jubilation for fifth day in a row, Indian equity benchmarks logged fresh record highs on Wednesday, which took Sensex and Nifty past their crucial 27,100 and 8,100 levels, respectively. Markets traded in the green throughout the session, though some volatility witnessed in late trade but overall the mood remained up-beat on the back of strong global cues. Meanwhile, traders also took a heart from the report which suggested foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on September 2, 2014. Sentiments also remained upbeat with current account deficit narrowing sharply to 1.7 per cent of GDP in the Apr-June quarter of 2014-15 compared to 4.8 per cent of GDP in the same quarter of 2013-14. On the macro-front, Indian services activity expanded at its weakest rate in three months in August as firms' order books filled up at a slower pace, which led to HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fall to 50.6 in August from 52.2 in July. Global cues too remained supportive with European markets trading higher in early deals, while Asian markets ended mostly in the green. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Appreciation in Indian rupee too supported the sentiments. Meanwhile, technology and software stocks remained on buyers’ radar on the back of firm U.S. manufacturing activity data, while shares of state-owned oil marketing companies too gained after Brent crude prices hit 16-month lows. Additionally, Telecom stocks too rang loud, led by gains of Bharti Airtel shares after the company signed an agreement to acquire over 2.7 million subscribers of yuMobile. Finally, the BSE Sensex surged by 120.55 points or 0.45%, to 27139.94, while the CNX Nifty gained 31.55 points or 0.39% to 8,114.60.