Markets to make another cautious start on weak global cues

The Indian markets in a choppy day of trade extended their fall, despite late hour recovery attempt in last session. Today, the start is likely to remain cautious on weak global cues and Nifty will retest 8100 level in early trade. Also, traders will be reacting negatively to the IT bellwether TCS numbers announced late yesterday. TCS second-quarter revenue missed street expectation, raising concerns that the company may not be able to continue its trend in coming quarters too. For the quarter ended September 30, TCS' revenue grew 3% sequentially, or 5.8% year-over-year. However, there will be some support to the market with Finance Ministry stating that reform measures would continue in order to boost economic activity. Also, Minister of State for Finance Jayant Sinha, allaying concerns of investors over pace of reforms in India has said the government has implemented “game- changing” measures to transform India's economic fortunes and improve the business environment in the country. There will be some cheer in the steel sector, as the World Steel Association (WSA) has said that world's third largest steel producer, is expected to grow to 81.5 million tonnes (MT) and 87.6 MT in 2015 and 2016, respectively, from 75.9 MT in 2014.

The US markets suffered sharp cuts in a volatile last session, pulling the Dow and the S&P 500 down, off the nearly two-month closing highs of last session, with uncertainty about the outlook for corporate results weighing down the sentiments. The Asian markets have once again made mostly a lower start, as Chinese factory-gate prices equaled their biggest slump since the global financial crisis. Japanese equities too fell as the yen rallied amid haven demand.

Back home, Tuesday’s trading session turned out to be a choppy day of trade for Indian equity benchmarks where key indices ended with marginal losses. Buying in last leg of trade mainly prevented a down day of trade at Dalal Street as markets for couple of times surrendered to selling pressure. Sentiments remained down beat after India’s retail inflation based on the consumer price index (CPI) for September increased to 4.41%, from 3.74% recorded for the previous month, on the back of higher food prices. Investors also remained on sidelines ahead of the September quarter results of IT-major Tata Consultancy Services (TCS), which is set to announce later today. However, downside remained capped 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. Some support came in with report that Industrial Production grew by 6.4% for the month of August, an improvement over the 4.2% growth registered in the previous month. Global cues too remained sluggish with European counters making weak start and Asian markets ending mostly in red. Back home, depreciation in Indian rupee too dampened the sentiments. Telecom stocks remained in limelight after, DoT released Spectrum Trading norms. It permitted Spectrum trading in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands and said that spectrum trading shall only be allowed between two access service providers and bands earmarked for access services by licensor to be called tradable bands. Though, DoT has not permitted spectrum leasing. Finally, the BSE Sensex declined by 57.58 points or 0.21% to 26846.53, while the CNX Nifty lost 11.90 points or 0.15% to 8131.70.