Markets to make a flat-to-positive start; WPI data eyed

The Indian markets despite a volatile trade managed to eke out modest gains in last session. Today, the start is likely to remain cautious and some upmoves can be seen latter in the day, though the trade will remain range bound. Traders will be getting some encouragement with government keeping its options open on convening a special session of Parliament for enacting the GST law on which Finance Minister Arun Jaitley declared that it was determined to stick to the rollout deadline of April 1, 2016. Meanwhile, a government-appointed panel to suggest ways to prune subsidies has favoured extending the cash transfer scheme to kerosene and food in three years for directly helping beneficiaries. Traders will also be eyeing the WPI inflation data slated to be announced later in the day. There will be some buzz in the market, as the government garnered a total of Rs 4,364 crore from the third tranche of coal auctions that came to an end on Thursday. The auto stocks will be in action, as part of a plan to phase out vehicles which are over 10 years old, the road transport ministry is looking to provide incentives of up to Rs 1.50 lakh to those who surrender their old vehicles. 

The US markets extending their consolidation mood made another flat closing in last session; the trade remained lackluster throughout the day after release of a slew of US economic data, including a report from the Commerce Department showing that retail sales rose in line with estimates in July. The Asian markets have made mostly a positive start, as the yuan stabilized as China’s central bank strengthened its currency’s reference rate for the first time since Tuesday’s devaluation.

Back home, Indian equity benchmarks ended the volatile day of trade marginally in green on Thursday as investors opted to buy beaten down but fundamentally strong stocks after four days of continuous drubbing. Markets, after a firm start, traded jubilantly in early deals as some sense of encouragement came with report that India's retail inflation easing to 3.78% in July from 5.40% in June, strengthening the case for an interest rate cut soon. Moreover, the growth in factory output accelerated to 3.8% in June from 2.5% in the previous month. Some support also came with report that a government appointed committee suggested that there was no legal basis to retrospectively impose the controversial minimum alternate tax on foreign investors. However, marketmen pared most of their gains after a turbulent and largely unproductive monsoon session of Parliament ended this afternoon without legislation including the Goods and Services Tax (GST) proposal being cleared. Sentiments were also weighed down after Indian rupee reversed its gains to slip near the key 65 per dollar mark against the US dollar on the back of unexpected devaluation of yuan. There were bout of volatility witnessed in last leg of trade where markets momentarily dipped into red, however there was some recovery in the final moments and benchmarks managed a close higher by around a quarter percent. Global cues remained supportive with European counters making a firm start and all the Asian markets ended in green. Back home, stocks related to banking counter remained on buyers’ radar as the macroeconomic numbers released yesterday have raised hopes of a rate cut by the RBI in the next monetary policy. On the flip side, metal continued to reel under pressure, hurt by the devaluation of the yuan. SAIL, Vedanta, NALCO, Jindal Steel, Tata Steel and Hindalco were the major losers from the metal pack. Finally, the BSE Sensex gained 37.27 points or 0.14% to 27549.53, while the CNX Nifty added 6.40 points or 0.08% to 8355.85.