Markets to make a soft start on feeble global cues

The Indian markets after a choppy trade, bucked the global trend to end higher in last session. Today, the start is likely to be soft on feeble global cues and traders will be cautiously approaching the markets with a private report stating that the country remains a 'long way off' from a complete turnaround in the corporate investment cycle despite various positive economic indicators. There will be some buzz in the India Inc, as the Reserve Bank of India (RBI) gave in-principle approval to 11 entities to open payments banks that will widen the reach of banking services and push the government’s goal of financial inclusion. In-principle approval will be valid for 18 months, after which the entities will be given formal licences. The infra stocks related to aviation will continue to remain under pressure after government scrapped the proposal to privatise Chennai, Kolkata, Jaipur and Ahmedabad airports. There will be some buzz in the steel stocks, as the Road Transport and Highways Minister Nitin Gadkari has said that the government will soon launch a portal for sale of steel at competitive prices to boost construction activity.

The US markets ended lower in last session after a volatile trade, with the Dow ending the session at its worst closing level in well over six months. Traders were concerned with the minutes of the Federal Reserve's latest monetary policy meeting, where most participants believed conditions for raising interest rates were approaching but not yet achieved. The Asian markets have made a weak start tailing the weakness in the US markets and on global growth concerns.

Back home, bucking the weak global trends, Indian equity benchmarks ended the choppy day of trade with a gain of over one third of a percent on Wednesday. Markets, after a weak opening, make decent recovery in early trade and scaled intraday high to regain their crucial 28,000 (Sensex) and 8,500 (Nifty) levels, but witnessed a choppy trade till last, with benchmarks paring some of the gains by the end. The local markets got major boost with Chinese stocks reversing sharp declines to end higher after the central bank injected more funds into the financial system for a second day in a bid to calm panicky markets. Sentiments also remained up-beat 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. Some support also came after the FM 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, the challenges included slow credit off-take. On the global front, European counters made a weak opening, while Asian markets ended the Wednesday’s trade mostly in red. Back home, appreciation in Indian rupee too aided the sentiments.On the other hand stocks related to metal counter remained under pressure tracking concerns of weak demand from China. Additionally, Coffee stocks that moved higher in last session, witnessed profit taking after the government said there was no “immediate plan” to permit foreign direct investment in the country's coffee and rubber plantation sector. Finally, the BSE Sensex surged by 100.10 points or 0.36% to 27931.64, while the CNX Nifty gained 28.60 points or 0.34% to 8495.15.