Markets to make a flat-to-cautious start after a long break

The Indian markets had ended lower before going for a long break as traders remained on sidelines. Today, the start is likely to be flat-to-cautious with major indices keep hovering in a range. There will be some support to the markets with the CII Business Confidence Index (CII-BCI) for July-Sept quarter FY15 shooting up to 57.4, up from 53.7 in April-June quarter and 49.9 in Jan-March quarter this year. During the same quarter last fiscal, the index had touched the all-time low value of 45.7. Similarly, Ficci’s Overall Business Confidence Index stood at 72.7, the highest in 15 quarters. Meanwhile, the Coal Ministry has sought the opinion of Attorney General on whether the government needs to bring out an Ordinance to deal with the issues arising from the Supreme Court decision to deallocate coal mines. There is likely to be buzz in the steel sector stocks, as the premier global agency, World Steel Association (WSA), in its short-range demand outlook has projected India’s steel demand to grow at 3.4 per cent during the current year. 

The US markets gave up some of their Friday’s gains in last session after a lackluster session of trade, as traders looked reluctant to take the markets further high lacking any major economic data. The Asian markets are showing mixed trend in early deals with some of the indices modestly in red and the Japanese market was trading cautiously after the yen held its biggest advance against the dollar since April, as the Bank of Japan is projected to keep record stimulus unchanged today.

Back home, Indian equity benchmarks ended lackluster day of trade slightly in the red on Wednesday with frontline gauges declining below their crucial 7,950 (Nifty) and 26,600 (Sensex) levels. Lack of buying triggers amid disappointing macro-economic data on domestic front and feeble global cues mainly contributed to down-session of performance at Dalal Street. Sentiments remained dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 485.93 crore on September 30, 2014, as per provisional data. Sentiments also remained down-beat after data released by the Controller General of Accounts revealed that Fiscal deficit touched 74.9 percent of the Budget Estimates for 2014-15 to cross Rs 3.97 lakh crore at the end of August. It also showed that the total expenditure of the government during April-August was over Rs 6.72 lakh crore or 37.5 percent of the estimates for the entire 2014-15 fiscal. Selling got accelerated after the HSBC Manufacturing Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, fell to 51.0 in the month of September from 52.4 in August. However, losses remained capped on report that the eight core industries grew at 5.8 per cent in August this year compared to 4.7 per cent during the corresponding month of last year. Global cues remained sluggish with European counters making a weak start, while trading in Asia remained subdued. Back home, decline in oil and gas sector mainly led the down-fall on announcement of Petrol price cut by 54 paisa a litre, also  the price of non-subsidised cooking gas (LPG)  has been cut by Rs 21 per cylinder and that of jet fuel (ATF) by a steep 3 percent on the back of falling international oil rates. However, the widely expected first reduction in diesel rates in over five years will have to wait till the return of Prime Minister Narendra Modi from the US. There will be buzz in the auto stocks as well, as they will start announcing their monthly sales numbers. Moreover, Auto stocks concluded lackluster on reporting monthly sales figure. Finally, the BSE Sensex declined by 62.52 points or 0.23%, to 26567.99, while the CNX Nifty lost 19.25 points or 0.24% to 7,945.55. Indian markets remained closed since Thursday to Monday.