Markets to get a cautious start on mixed global cues

The Indian markets recovering ground in last session managed a close in green; today the start is likely to remain cautious. Traders will be concerned with a private report that consumer sentiment eased for the third consecutive month in November as respondents sharply revised down their short-term outlook for business conditions. Meanwhile, Minister of State (Independent Charge) for Petroleum and Natural Gas Dharmendra Pradhan has said that the hike in excise duty on petrol and diesel has been done to help the Centre raise money for deployment in welfare schemes while not burdening the consumer. There will be some buzz in aviation stocks on report that domestic air traffic in India grew by 16.3 percent, more than China, in October compared to the same period last year. Also, there will be some action in coal and mining stocks, as the Coal Ministry is set to launch within a fortnight an electronic platform to address all regulatory hurdles related to coal mines that would be on the pattern of Prime Minister's Project Monitoring Group. However, the mining industry isn't happy with government's decision and route to auction mining leases for iron ore, bauxite and gold through an amendment to the country's 57-year-old MMDR Act.

The US markets ended modestly lower in last session amid choppy trade, however Labor Department report showed that initial jobless claims pulled back below 300,000 in the week ended November 29th.The Asian markets have made a mixed start ahead of a monthly US jobs report.

Back home, Thursday proved a bit of disappointment for the Indian markets, when the benchmarks surged to their fresh historic high with a gap-up start and cooled off within the very first hour of trade to turn choppy thereafter. The markets looked in a consolidation mood and the major bourses remained range-bound after losing their early gains and slipping into red for a couple of times. Traders in early deals got support of Reserve Bank of India deputy governor H. R. Khan’s statement that the central bank is reasonably comfortable with the current account deficit because of lower oil prices, and also with the government setting up a High Level Committee (HLC) to interact with trade and industry and identify areas where clarity on tax laws is needed. The HLC will give recommendations to the CBDT/CBEC for issuance of appropriate clarifications by way of circulars, instructions etc. on tax issues. The CBDT/CBEC will issue the required clarifications, circulars, instructions etc. within a period of 2 months from the date of receipt of recommendations of the HLC, the finance ministry said in a statement. The global markets showed a better trend and led the surge in early gains of the domestic markets, The European markets though made a positive start but were trading cautiously near an almost seven-year high ahead of a speech by European Central Bank President Mario Draghi. Back home, the local markets rushed in second half to cover some of their lost ground and managed to recover half of the gains they had gathered in opening trade, with Sensex managing a triple digit rally and Nifty closing past 8550, but profit booking was clearly visible on the trade and traders taking opportunity to pocket the gains. Report that rupee volatility remained at 4-month low despite global turmoil, too supported the sentiments while the consistent interest of retail interest in broader markets kept the market in motion. On the sectoral front, the defensive FMCG sector was in most jubilant form, led by the cigarettes major ITC on reports that Health Ministry proposal to ban sale of loose cigarettes is likely to be put on hold following objections by some MPs, including some Union ministers, and farmers associations against taking drastic regulatory steps. Among cigarette companies, ITC surged by 5.44 per cent, Godfrey Phillips rose 5.08 per cent and VST Industries rose 2.56 per cent on the BSE. Finally, the BSE Sensex surged by 120.11 points or 0.42%, to 28562.82, while the CNX Nifty gained 26.75 points or 0.31% to 8,564.40.