Markets in a consolidation mood, make a flat start of the day

Indian markets are looking in a consolidation mood in early trade on Tuesday, with a flat start and trading marginally in red. Though, in initial trade there is not much serious profit taking but traders are taking cautious stance, reacting to mixed global cues, as the US markets ended lower and most of the Asian peers too are following the trend. However, the Japanese market was maintaining its gains, despite the Bank of Japan refraining from boosting stimulus even after the economy shrank last quarter. On the domestic front, traders are not getting much support from the CPI data announced yesterday after market hours, where Consumer price inflation eased to 3.66 percent in August from 3.69 percent in July 2015. Inflation remains within the Reserve Bank of India's (RBI) comfort zone, allowing it to reduce the repo rate by another 25 bps in 2015. Rupee weakness in early deals too was weighing down the sentiments, traders are eyeing Fed meeting later in the week, any rate hike in the US would not only strengthen the dollar but would lead to selling from foreign investors in emerging market stocks.

Steel stocks after moving higher in last few sessions are cooling off; though the government finally imposed provisional safeguard duty of 20 percent on import of certain categories of steel with a view to protect domestic producers from recent surge in inward shipments.Tata Steel was down by around 2%, JSW Steel lost over a percent and Vedanta was down by over 2%.

The BSE Sensex is currently trading at 25827.80, down by 28.90 points or 0.11% after trading in a range of 25780.23 and 25909.83. There were 12 stocks advancing against 17 stocks declining on the index.

The broader indices trading marginally in green were outperforming the benchmarks; the BSE Mid cap index was up by 0.02%, while Small cap index gained 0.11%.

The top gaining sectoral indices on the BSE were FMCG up by 0.80%, Realty up by 0.67%, INFRA up by 0.44%, Oil & Gas up by 0.41%, PSU up by 0.33%, while Metal down by 0.78%, Bankex down by 0.42%, Consumer Durables down by 0.38%, Auto down by 0.29%, Capital Goods down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.83%, Hindustan Unilever up by 1.07%, ONGC up by 0.94%, ITC up by 0.73% and Sun Pharma Inds. up by 0.54%. On the flip side, Vedanta down by 2.38%, Tata Steel down by 1.74%, Hindalco down by 1.59%, Hero MotoCorp down by 1.05% and HDFC down by 0.98% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has invited US businesses to take advantage of the huge investment opportunity in the infrastructure sector in the country and assured the global investors of the fairest and predictable taxation regime. Jaitley further stated that there are lot of scope for the American companies in the infrastructure sector including roads, ports, railways and clean energy.

While expressing the hope Jaitley said that the Indo-US bilateral trade will surge to $500 billion from $100 billion in next few years, on the back of growing cooperation between both the nations. He expressed his confidence that despite global financial turmoil, taxation issues India will be an attractive investment destination for global investors.

He further stated that already the current Government is taking efforts to resolve several legacy issues that have brought adverse reputation to the Indian tax regime. He said that our objective is to build on Indo-US bilateral relations. We have a large number of resources while they have the capital.

Jaitley referring to the global financial turmoil, said that though it has made the task of policymakers difficult and 'there is not an easy moment or a day', but asserted that India will not be impacted as the savings on account of declining oil and other commodity prices have helped the government allocate more funds for the infrastructure sector and social sector schemes.

The CNX Nifty is currently trading at 7849.45, down by 22.80 points or 0.29% after trading in a range of 7841.25 and 7880.00. There were 14 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.77%, Cairn India up by 1.39%, Tech Mahindra up by 1.26%, Hindustan Unilever up by 1.16% and ONGC up by 0.89%. On the flip side, Vedanta down by 2.91%, Hindalco down by 2.10%, Tata Steel down by 2.07%, Ambuja Cement down by 1.51% and Kotak Mahindra Bank down by 1.32% were the top losers.

The Asian markets were mostly in red, barring FTSE Bursa Malaysia KLCI which was up by 7.17 points or 0.44% to 1,646.80 and Nikkei 225 up by 194.58 points or 1.08% to 18,160.28.

On the other hand, Shanghai Composite lost 78.65 points or 2.53% to 3,036.15, Hang Seng declined by 61.51 points or 0.29% to 21,500.39, Taiwan Weighted lost 60.08 points or 0.72% to 8,247.21, Jakarta Composite was down by 48.18 points or 1.1% to 4,342.19, Straits Times was lower by 23.99 points or 0.84% to 2,847.48 and KOSPI Index was tad lower by 0.06 points to 1,931.40.