Markets to see some recovery after their continuous fall

The Indian markets continued their bear run and slumped further in last session, losing their crucial psychological levels. Today, some recovery can be expected and markets are likely to get a green start on supportive global cues and Nifty may regain the 8000 levels once again. Traders will be getting support with the report of Department of Industrial Policy and Promotion that foreign direct investment (FDI) flows into India more than doubled to $3.5 billion in July, compared to FDI worth $1.65 billion in July 2013. Also, the government has got a pat on its back by the international credit rating agency Crisil Ratings, which has said that efforts being taken by the Narendra Modi government to boost the real estate sector are in the 'right direction'. There will be some buzz in the PSU oil marketing companies, as they have started making a profit of 35 paise on every litre of diesel sold after a gap of five years. Steel stocks too may see some action with Steel Ministry saying that Finance Ministry will take a call on withdrawing import duty of iron ore in the face of falling domestic supplies. There will be some reaction in airlines stocks as well, as fewer states have expressed willingness to revise state taxes on aviation turbine fuel, though the Centre has urged all state governments to rework the tax structure on jet fuel in the interest of the aviation industry.   

The US markets ended higher in last session, coming out of their consolidation mood as traders looked ahead to the Federal Reserve's highly anticipated monetary policy announcement Wednesday afternoon. The Asian markets have made mostly a positive start, with some of the regional indices halting their losing streak. There was some support with report of China providing 500 billion yuan ($81.4 billion) of liquidity to its five biggest banks.

Back home, extending their previous session’s southward journey, Indian barometer gauges witnessed blood bath on Tuesday with both the major indices losing over a percentage point and ending below their crucial 7,950 (Nifty) and 26,500 (Sensex) levels. Investors booked their profits ahead of the two-day US Fed meet which could provide cues of an interest rate hike in the US. Further, selling by foreign funds in the previous session also weighed on market sentiment. Foreign funds sold index futures worth Rs 1,394 crore and Rs 74.59 crore in the cash segment on September 15, as per provisional exchange data. Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include realty, power, public sector undertaking and infrastructure. Sentiments remained down-beat after Reserve Bank of India governor Raghuram Rajan signalled that he would keep interest rates unchanged at the month-end monetary policy announcement. Rajan has said that though the inflation is coming down but still has some way to go before it can be declared that we are out of the woods. Sentiments also remained dampened after India’s export growth slipped to 2.35 per cent at $26.95 billion in August, pushing up trade deficit to $10.83 billion, as imports of gold surged 176 percent after policy makers eased shipment curbs. Selling got intensified as European markets made an awful start, while the Asian markets ended mostly in the red. Back home, Stocks related to Capital Goods counter failed to draw any solace from the reports suggesting the government has approved Rs 930 crore scheme to enhance the competitiveness of the capital goods sector in order to boost the economy. Moreover, public sector oil marketing companies (OMCs) edged lower on reports suggesting India would decide on ending government control on diesel pricing after elections in two states next month even though local prices of the fuel were higher than the global rates, making a case for a cut in retail prices. Additionally, telecom stocks remained in limelight after Department of Telecom (DoT) has filed a petition in the Supreme Court (SC) against telecom tribunal’s verdict that allowed Airtel, Idea and Vodafone to offer 3G services under a roaming arrangement in areas where not all of them own 3G spectrum. Finally, the BSE Sensex plunged by 324.05 points or 1.21%, to 26492.51, while the CNX Nifty dropped by 109.10 points or 1.36% to 7,932.90.