Markets to make a soft-to-cautious start on weak global cues

The Indian markets after a choppy trade ended modestly lower in last session, there were concerns of weak monsoon and global turmoil that weighed on the markets. Today, the start is likely to be cautious on weak global cues and before any bounce back major indices will extend their decline with Nifty retesting 8450 level. Markets are likely to get some support with Finance Minister Arun Jaitley’s statement, who making a case for interest rate cut has said that that RBI will take note of the declining inflation and take a decision accordingly. Meanwhile, the FM has asserted that India must completely open up its economy to global investment, except for rare sectors. He said that while macroeconomic indicators like inflation and industrial production were positive, he said the challenges included slow credit off-take. The realty stocks will remain in action, after environment minister Prakash Javadekar’s announcement that the eco-sensitive zone (ESZ) around the Okhla Bird Sanctuary in Delhi will be kept within reasonable limits, keeping in mind the requirements of property buyers within the 10 km radius of the sanctuary. There will be some buzz in the pharma stocks, as the government assured the pharma industry of “every possible help” in resolving its issues related to exports and said efforts would be made to expedite work on different proposals to realise the full potential of the sector.

The US markets ended modestly lower in last session, giving up their early gains on disappointing Wal-Mart earnings. The company reported weaker than expected second quarter earnings and lowered its full-year guidance. The Asian markets have once again made mostly a lower start, with Chinese markets extending the slump. The rout in Chinese shares stoked concern about the health of the world’s second largest economy ahead of Federal Reserve minutes.

Back home, extending their southward journey for second day in a row, Indian equity benchmarks ended the volatile day of trade slightly in the red on Tuesday. After a jubilant start, domestic bourses lost momentum in noon deals and entered into the red terrain as sentiments took U-turn on worries that cooling demand in China will weigh on the trade-reliant region. In final hour of trade markets made couple of attempts to regain their green trajectory, but continuous profit taking in some blue-chips and PSU stocks led the markets lower for the day. Sentiments remained dampened after rating agency Moody's Investors Service on Tuesday scaled down its projections for India's economic growth for 2015-16 to 7% from an earlier estimate of 7.5% on deficient monsoon. The rating agency, however, maintained its growth projections of 7.5% for the next financial year. Meanwhile, the India Meteorological Department (IMD) on August 17 stated that, for the country as a whole, cumulative rainfall during this year’s monsoon season was 10 per cent below the Long Period Average (LPA) until August 17. However, losses remained capped after the Confederation of All India Traders (CAIT) called upon the Prime Minister to convene a special session of Parliament soon to pass the deadlocked GST Bill and has asked parties not to play a “political innings” on the issue. Some support also came with report that India and the United Arab Emirates (UAE) agreeing that the investment institutions of UAE will be strive to raise their investments in India by setting up UAE-India Infrastructure Investment Fund. The infrastructure fund aims to finance infrastructure development in India and will target a corpus of $75 billion. On the global front, European counters, after a positive start, traded in red in early deals, while Asian markets ended mostly in red. Back home, Coffee stocks kept buzzing on a report that the government is weighing foreign direct investment in plantation sector. A proposal to this effect is under consultation of the commerce and industry ministry. The move will bring in foreign players with efficient technology, and ramp up coffee production in the country, thereby boosting India's coffee exports. Finally, the BSE Sensex lost 46.73 points or 0.17% to 27831.54, while the CNX Nifty declined by 10.75 points or 0.13% to 8466.55.