Markets to get a soft start on feeble global cues

The Indian markets were first to be on the declining trajectory and had lost over two percent in the last session. Today, the start of the penultimate session of the F&O September series expiry is likely to be in red and Nifty may retest the 7750 levels in very early trade tailing the feeble global cues. However, volatility is likely to be seen in the markets and some short covering too will be witnessed ahead of the F&O series expiry. Traders will also be getting some support with Finance Minister Arun Jaitley’s statement that we have learnt to live in the era of turmoils and the government is focussing on strengthening the country's real economy and harnessing its true growth potential of 8-9 per cent. Meanwhile, External Affairs Minister Sushma Swaraj, asserting that India offers immense opportunities, has sought investments from the US industry in both public and private sectors in the country for a “win-win” outcome. There will be some buzz in the power sector, as the State governments have been asked to expedite the renewable energy capacity addition for the 12th Plan (2012-2017) to ensure optimal utilisation of the transmission infrastructure under Green Energy Corridor. The aviation stocks too will be in action, on report that passenger traffic on domestic airlines increased by 18.6% in August.

The US markets plunged in last session on ongoing uncertainty about the outlook for US monetary policy. Weakness in the European markets also weighed on US stocks. The Asian markets too have made a weak start following global sell-off and after a preliminary Chinese manufacturing gauge plunged to the lowest level since 2009.

Back home, final hour of trade proved to be the curse for the markets and bourses settled below their crucial 25,700 (Sensex) and 7,850 (Nifty) bastions with a cut of over two percentage points as investors turned risk averse amid lingering global growth worries. Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include metal, capital goods, power, banking and realty. Earlier, markets rose to a one-month high amid renewed hopes of a rate cut by Reserve Bank of India (RBI). Some support also came with Finance minister Arun Jaitley’s statement that continuing reforms will push India’s economic growth higher than last year's 7.3 percent despite adverse global winds. However, markets witnessed sudden fall in last leg of trade amid profit taking at higher levels as traders turned cautious ahead of the expiry of September derivative contracts on Thursday. Sentiments also weighed down with Asian Development Bank’s statement that growth in developing Asia will likely be slower than previously thought as a slowdown in China's economy hurts demand; it has also urged policymakers in the region to strengthen financial-system buffers against external shocks. Marketmen also failed to draw any sense of relief with India Meteorological Department’s (IMD) report that the enhanced activity of the southwest monsoon across several parts of the country for the next three-four days is giving a breather to regions reeling under severe water deficiency. Selling got intensified after European markets made an awful start, however, Asian markets following the US trends ended mostly in the green. Back home, depreciation in Indian too dampened the sentiments. Selling in metal counter mainly played the spoil sport with S&P BSE Metal space losing over four percent on demand growth concern amid faltering economies around the globe. Finally, the BSE Sensex plunged by 541.14 points or 2.07% to 25651.84, while the CNX Nifty declined by 165.10 points or 2.07% to 7812.00.