Markets to get a good start of the new week on positive global cues

The Indian markets, losing their momentum made a flat closing with a positive bias in the last session. Today, the start is likely to be strong tailing supportive global cues on optimism from US. However, traders will now be eyeing the second quarter result announcements for further cues.  Marketmen will be getting some support with reports that the government may extend export incentives such as cheap credit to even large players in sectors like pharmaceuticals, chemicals and electronics. The manufacturing sector stocks will be in focus, as a joint survey by CII-BCG has said that the Centre and states need to create an appropriate ecosystem and provide sops to businesses in order to develop a robust manufacturing base in the country. Meanwhile, industry body Assocham has approached the government for incentives like a cut in excise duty, teaser loans for housing and interest subvention for exporters, saying that sectors like real estate, power, steel, gems and jewellery are in a real crisis.  It has added that RBI, banks, states and the Centre should move fast to rescue the troubled power distribution companies. The sugar sector stocks are likely to be in action on reports that the government is working on a new subsidy scheme to be implemented in the current 2015-16 season, which started this month, to boost export of surplus sugar and help mills clear dues of over Rs 12,000 crore to farmers.

The US markets rallied in last session recovering from initial drops, as the weaker than expected job growth also shored up expectations that the Federal Reserve will hold off on raising interest rates. The Asian markets have made mostly a positive start with the indices in the region heading for their longest winning streak in almost three months, with likelihood that near-zero interest rates will persist into next year in the US.

Back home, Indian equity benchmarks, trimming most of their initial gains, ended Thursday’s trade with marginal gains and extended their winning streak to third straight session. Markets made a gap-up opening supported by positive global sentiments but markets turned choppy as investors started booking profits at higher levels. There was some disappointment after growth in eight core sectors - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity, slowed to 2.6% in August compared with 5.9% in the corresponding month last year as steel production shrank and coal output flattened. Sentiment was also tempered by data that showed the country's manufacturing activity in September slowed more than expected to a seven-month low. Nikkei/Markit survey stated that India's manufacturing sector output slipped to a seven-month low of 51.2 in September, as order flow turned sluggish amid difficult economic climate. Also, the rating agency Fitch Ratings has lowered India’s GDP growth estimate for the current fiscal to 7.5 percent from 7.8 percent on average monsoon but said the country is poised to grow at 8 percent next fiscal on reform push. Traders also remained concerned with the monsoon season ending on Wednesday with a 14% deficit, making it the weakest monsoon since 2009. In terms of average countrywide rainfall during the season (June-September), this year was the third lowest since 1979. Global cues remained supportive with European counters making a firm start, while Asian markets rallied on Thursday. Back home, appreciation in Indian rupee too supported the sentiments. Public sector oil marketing companies (OMCs) viz. HPCL and BPCL edged higher after increasing diesel price by 50 paise per litre effective October 1, 2015. Stock related to auto space remained lime light with auto sales numbers for the month of September starting to trickle in. Finally, the BSE Sensex gained 66.12 points or 0.25% to 26220.95, while the CNX Nifty added 2.00 points or 0.03 % to 7950.90.