Markets to see some recovery after last session’s sharp fall

The Indian markets suffered deep cuts with major indices slipping from their record highs in last session. Today, the start is likely to be flat-to-green and some recovery can be expected after the big fall as the global markets too are giving positive cues. Today there is likely to be major buzz in the PSU segment with the government kicking off the most ambitious disinvestment programme, targeting to mop up a record Rs 45,000 crore by selling shares in blue chips public sector companies-Coal India, ONGC and National Hydroelectric Power Corporation (NHPC). Markets will be additionally getting support with the United Nations Conference on Trade and Development (UNCTAD) saying in its latest report that the Indian economy will grow at a rate of 5.6 percent in 2014. Auto sector too is likely to remain in jubilant mood, as the car sales continued their positive momentum and moved up for the fourth month in running, rising by 15% in August. There will be some buzz in the sugar stocks as well, as the Food Minister Ram Vilas Paswan has said that the Centre is trying to resolve a stalemate between the Uttar Pradesh government and the state's sugar producers.

The US markets made a bounce back in last session and ended higher supported by strength in the technology sector stocks, though some of the traders remained on sidelines amid lack of major US economic data. The Asian markets have made a mixed start and some of the indices are trading in red, Shanghai market was trading up after China reported slower-than-estimated inflation.

Back home, extending their southward journey, Indian equity benchmarks ended the session in the red with frontline gauges declining below their crucial 27,100 (Sensex) and 8,100 (Nifty) levels on weak global cues. Investors also remained on sidelines ahead of release of macro-economic data, July factory output and August CPI numbers. The street widely expects Industrial production to grow 1.8% from a year earlier in July, slower than June’s 3.4% increase, while India’s consumer price inflation, closely tracked by the Reserve Bank of India, is expected to come down to 7.80% in August from July’s 7.96%. Depreciation in Indian rupee against dollar too dampened the sentiments. Selling got intensified as European markets made a sluggish opening ahead of France industrial production report. Asian markets too ended mostly in the red. Back home, selling witnessed in select mining and power related 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. Moreover, auto stocks which were holding up during the session after data released by the Society of Indian Automobile Manufacturers (SIAM), suggested that domestic passenger car sales grew by 15.16% to 153,758 units in August this year as compared to 1,33,513 units in the same month of 2013, too surrendered to selling pressure by close of trade. Additionally, shares of cigarette companies like ITC, Godfrey Phillips India and VST Industries edged lower on reports that the government may tighten norms to put a check on smoking. On the flip side, shares of companies engaged in shipbuilding business rallied by up to 13% on reports that the government is said to be looking at several options to boost ship building in the country. Finally, the BSE Sensex plunged by 207.91points or 0.76%, to 27057.41, while the CNX Nifty declined by 58.85points or 0.72% to 8,094.10.