Markets likely to make a mildly positive start on supportive global cues

The Indian markets gained in last trading session before going for a holiday and today are likely to make a mildly positive start taking cues from the regional peers. However, there will be some cautiousness too, as the Paris-based think tank OECD, revising its forecast downwards has projected 5.4 per cent growth for the Indian economy this year, as global recovery continues at a moderate pace. Earlier in September, it had projected 5.7 per cent growth rate for India. Today, there is likely to be some buzz in the power sector stocks, as the Power and Coal Minister Piyush Goyal has said that the government has set an ambitious target of attracting Rs 15 lakh crore ($250 billion) investment in the power sector in the next 4-5 years. The realty stocks that have been in action for last couple of days after government liberalized foreign direct investment norms for the sector, may see some further movement on report that government is expected to soon come out with some clarifications on the rules of the policy. Banking stocks too will keep buzzing after global credit rating agency Moody’s said that the asset quality of state-owned banks will continue to be burdened by weak financial health of Indian corporate.

The US markets ended modestly higher in last session as traders looked ahead to tomorrow’s closely watched monthly jobs report; also there was a report of bigger than expected drop in the weekly initial jobless claims that supported the markets. The Asian markets have mostly made a positive start on hopes of a good jobs data from the world’s largest economy before a government report on employment.

Back home, resuming their northward journey, Indian equity benchmarks ended the Wednesday’s trade at record closing high levels with Sensex surpassing its crucial 27,900 bastion, while Nifty ending tad below its crucial 8,350 mark. Overall, sentiments remained up-beat on falling global crude oil prices which dipped to its lowest closing point since October 2011. Besides, World Bank’s report, which recently ranked India 142nd in its ease of doing business list, saying the ranking will improve by at least 50 notches if one includes the best practices followed at the state level, also influenced the trading sentiment. Some support also came after foreign portfolio investors bought shares worth a net Rs 1413.34 crore during the previous trading session on Monday as per provisional data released by the stock exchanges. Meanwhile, there was some buzz in PSU sector after Finance Minister Arun Jaitley said that the government is open to privatisation of certain loss-making public sector companies. However, up-side remained capped as investors remained cautious on the National Council of Applied Economic Research’s (NCAER) latest projection, where it has lowered India’s GDP growth forecast to 5 percent in the current financial year on weak economical fundamentals and uncertainties in growth prospects. On the macro economic front, the disappointing services PMI data dampened the investor sentiment. Growth in India’s dominant service industry stalled last month as new orders came in at a weaker pace, adding to pressure on the government to drive through economic reforms. The HSBC Purchasing Managers’ Index (PMI) fell to 50 in October from September’s 51.6, the lowest in six months and right on the break-even point between growth and contraction. Global cues too remained supportive with European markets making a green start, however the Asian markets ended mostly in the red. Back home, banks which are a proxy to the economy witnessed buying interest from investors after global rating agency Standard & Poor’s (S&P) upgraded  India’s credit outlook to ‘stable’ from ‘negative’. Additionally, fertilizer stocks edged higher on reports that the Fertilizer Ministry has invited fresh proposals for setting up urea plants as well as increasing the capacity of existing ones under the recently notified New Urea Investment Policy for increasing domestic production. On the flip side, shares of most of the frontline automobiles companies continue to trade in red after reporting drop in vehicle sales during the month of October. Finally, the BSE Sensex gained 55.50 points or 0.20% to 27,915.88, while the CNX Nifty gained 14.15 points or 0.17% to 8,338.30. Indian stock market remained shut on Thursday, on account of a public holiday.