Markets to extend the somberness with a sluggish start

The Indian markets consolidated in last session after posting big gains in previous one. Trade turned choppy and major indices entered into red for a couple of times. Today, the start is likely to remain sluggish on soft global cues and choppiness is likely to persist with the start of F&O expiry week. Some action could be seen in the telecom stocks with the Home Ministry insisting that obtaining prior security clearance should be made mandatory for service providers for granting them telecom licences. There will be some buzz in the services sector, as the data of Department of Industrial Policy and Promotion has stated that foreign direct investment in the services sector rose marginally to $1.03 billion during the April-July period of the ongoing fiscal, compared to $1.02 billion during the same period of the previous fiscal, 2013-14. On the same time there will be some somberness in the textile stocks, as the Prime Minister’s Office has rejected the Textile Ministry’s request for linking the entire textile sector to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), however, could be linked to specific sectors within the textile industry such as handicraft and handloom. Pharma stocks too could be reeling under pressure with the government capping the prices of another 36 drugs, including those used to treat infections and diabetes, in its latest move to make essential medicines more affordable.

The US markets made a mixed closing in last session, although the leading economic index rose in August. The Asian markets are trading mostly in red with Group of 20 finance chiefs and central bankers after highlighting euro zone concerns said low interest rates could lead to a potential increase in financial-market risk.

Back home, Indian equity benchmarks ended the session flat as investors opted to book profit off the table ahead of the September F&O expiry week. In extremely volatile session, frontline gauges traded in a tight range with Sensex and Nifty swinging between negative and positive zone throughout the session to end flat. Sentiments in early deals remained up-beat with Finance Secretary Arvind Mayaram’s statement that India is following economic growth inducing policies and is confident that the GDP will rebound to over 7 percent in 2-3 years. Meanwhile, overseas investors bought index futures worth $106.22 million on September 18, as per NSE data. Foreign banks bought debt worth of 18.93 billion rupees ($311.7 million), as per CCIL data. On the global front, British markets rallied and the rest of Europe followed suit on Friday, while the Asian markets shut shop in the green on signs of US economic strengthening. Select stocks from textile remained on buyers’ radar as the Textiles Minister Santosh Gangwar has approved setting up of 13 textile parks, entailing minimum investment of Rs 100 crore each. Additionally, shares of Tata Group companies barring Tata Motors edged higher after global rating agency Moody’s upgraded the debt ratings for many group firms including Tata Motors, Tata Steel and Tata Consultancy Services (TCS). On the flip side, select stocks from pharma space edged lower with the National Pharmaceutical Pricing Authority bringing prices of 43 essential medicines to treat diseases like tuberculosis or heart ailments under a control regime. Finally, the BSE Sensex declined by 21.79 points or 0.08%, to 27090.42, while the CNX Nifty gained 6.70 points or 0.08% to 8,121.45.