Markets to make a soft start on sluggish global cues

The Indian markets pared some gains in last session, though the decline was modest but markets lacked confidence to move further from their record highs. Today, the start is likely to be soft and the bourses may extend their somberness on sluggish global cues. There will be buzz in the India Inc with the new norms issued by the Reserve Bank of India (RBI), where the apex bank has said that companies and individuals who have furnished guarantees for willful defaulters can also be accused as willful defaulters. There will be some cautiousness in mining and power stocks, as the Supreme Court after declaring all 218 coal block allocations since 1993 as illegal has  reserved its decision on their fate. Also in a meeting with Piyush Goyal, Minister of State (Independent Charge) for Power, Coal, and New & Renewable Energy, all the States assured the Centre that they would reduce technical and commercial losses in accordance with the agreed trajectory and those over-achieving will be incentivised. Meanwhile, the oil & gas stocks will be buzzing as the four-member committee of secretaries, set up by the Central government last month to examine the new gas pricing mechanism, will submit its report today.

The US markets ended lower in last session partially due to profit taking, while worries about the outlook for interest rates also generated some negative sentiment. Asian markets have mostly made a weak start led by the Hang Seng market and with some of the indices declining the most in a month amid concern over the timeline for US interest-rate increases.

Back home, markets witnessed consolidation after hitting record high in the previous session, which led to Sensex, concluding below the psychologically crucial 27,300 levels while Nifty managed to end tad above its crucial 8,150 mark, with little loss of around quarter a percent. ‘Choppiness’ mainly turned out to be theme of the session as barometer gauges dipped several times below their psychologically crucial 27,200 (Sensex) and 8,150 (Nifty) levels only to recover later, nevertheless it was buying in the last hour of trade that downsized bourses’ losses. Weakness in Indian rupee against dollar dampened the sentiments. Moreover, markets failed to draw any sense of relief from reports that Finance Ministry pitched to Moody’s for ratings upgrade on the back of improving macro-economic fundamentals. Finance Ministry informed Moody's that the Budget 2014-15 has provided an impetus to growth and the government is taking steps to keep the fiscal deficit under check. However, losses remained capped as some support came with leading international risk-rating firm Maplecroft saying that India is now the world’s best growth-market bet as the risks of doing business in the country have declined with the Narendra Modi government having completed its first quarter. Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 1162.98 crore on September 8, 2014, as per provisional data from the stock exchanges. Global cues too remained sluggish with European markets trading in the red in early deals. Back home, selling in realty stocks mainly played the spoil sport. Moreover, retail stocks such as Koutons Retail, Future Retail and Shoppers’ Shop edged lower as Commerce and Industry Minister Nirmala Sitharaman reiterated that the Government will not allow foreign direct investment in multi-brand retail. On the flip side, Metal and Power counters edged higher ahead of the Supreme Court's decision on coal block allocations later today. Earlier on September 1, the Centre had requested the Supreme Court not to cancel the permits for 46 coal blocks that were functioning or were about to start production. Finally, the BSE Sensex declined by 54.53 points or 0.20%, to 27265.32, while the CNX Nifty lost 20.95 points or 0.26% to 8,152.95.