Markets to get a positive start reacting to surge in IIP data

The Indian markets losing their momentum ended with cut of over half a percent in last session, with traders taking cautious approach ahead of the key macro data. Today, the start is likely to be in green and despite weak regional cues markets are likely to move higher, as the industrial output rose to nearly 3-year high of 6.4 percent in August on improvement in manufacturing and capital goods, while retail inflation despite rising to 4.41 percent in September due to costlier food items, remained within comfort zone. Traders will also be getting some support with the report that Centre and States have completed the drafting of model Goods and Services Tax law as well as an integrated-GST or iGST law, which will be put up in public domain by early November and the Empowered Committee of state Finance Ministers is likely to meet this month to discuss the legislations -- CGST, SGST and iGST. There will be some buzz in the coal and mining stocks, as the fourth phase of coal mines auction will start very soon and the government is considering bringing 8-10 mines under the hammer. The PSU oil marketing companies are likely to move higher, as the international crude oil futures tumbled on profit-taking and a report of higher OPEC production.

The US markets ended higher in last session despite a lackluster trade, with Dow and the S&P 500 reaching to their best closing levels in almost two months. Traders remained mostly on sidelines amid the Columbus Day holiday and a lack of major US economic data. The Asian markets retreating from the seven-week highs were trading mostly in red, after China’s imports fell by more than estimated.

Back home, Monday turned out to be a disappointing session for the Indian equity indices which got pounded by over half a percentage with frontline gauges breaching their crucial support levels of 27,000 (Sensex) and 8,150 (Nifty). Markets made a gap-up opening after IT bellwether Infosys reported better-than-expected Q2 numbers, but soon choppiness crept in and key gauges entered into red terrain as  Infosys reduced its full-year US dollar revenue growth guidance. The company said that for the fiscal year ending March 31, 2016, revenues are likely to rise by 6.4% - 8.4%, down from a previous estimate of 7.2% - 9.2% in dollar terms. Investors remained on sidelines ahead of consumer price index (CPI) and industrial production data scheduled to be unveiled after market hours today. The all-India general CPI inflation was nearly flat 3.66% in August 2015 compared with 3.69% (revised) reading in July 2015, while industrial production rose at 4.22% in July 2015 compared with growth of 4.36% in June 2015.  However, losses remained capped upto certain extent as some support came with Chief Economic Advisor Arvind Subramanian’s statement that growth in collection of indirect taxes in the first half of the current fiscal shows robust GDP expansion. Indirect tax collection increased 35.8 percent in the April-September period of the 2015-16 fiscal to Rs 3.24 lakh crore. Meanwhile, the IMF has recommended that the country should launch next phase of economic reforms and improve its business climate for achieving faster and more inclusive growth. On the global front, European counters traded mostly in red in early deals, though all the Asian markets ended in green. Back home, selling in software and technology counters mainly weighed down sentiments, led by Infosys which lost around 4%. On the flip side, buying witnessed in metal pack with CNX Metal index rising more than 10% on the back of surge in global commodity prices. Finally, the BSE Sensex declined by 178.96 points or 0.66% to 26900.55, while the CNX Nifty lost 46.10 points or 0.56% to 8143.60.