Markets to get a cautious but positive start of the new week

The Indian markets rallied in last hour of last session, taking the benchmark indices above their crucial psychological levels. Today, the start is likely to be cautious but in green and once the trade stabilizes Nifty may approach the 8300 levels too, on good global cues after China’s third-quarter GDP figures beat forecasts. The caution is likely to be because of another IT major HCL Tech reporting a disappointing numbers. The company’s Q1 profit declined by 3.2 percent sequentially to Rs 1,726 crore from Rs 1,783 crore. However, marketmen will react positively to Reliance Industries numbers, which beat the forecast with its September quarter numbers. Company’s Profit after tax, including exceptional items, was higher by 12.5 per cent at Rs 6,720 crore. Traders will also be getting some support with report that the government is likely to go for a fresh round of consultations on Goods and Service Tax with the Opposition parties after the Bihar elections. Parliamentary affairs minister M Venkaiah Naidu has said that further discussions with the Opposition on passing the bill will be held during the Winter Session of Parliament. Power stocks especially the discoms are likely to be in action, as the Power, coal and renewable energy minister Piyush Goyal has said that the government is working on permanent solution to distribution problem. 

Apart from HCL Technologies numbers traders will also be reacting to some other important result announcements, Gati , Hindustan Zinc , Petronet LNG , SKS Microfinance and UltraTech Cement are some of the major companies releasing their earnings for the September quarter today.

The US markets made a positive close in last session, despite mixed set of economic data, with Dow and the S&P 500 reaching nearly two-month closing highs. The Asian markets after making a mostly cautious start are showing a positive trend after the report of Chinese economy expanding at 6.9% in third quarter, better than expected, as the services sector propped up the world’s second-largest economy, but still it was slowest since 2009. 

Back home, Friday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around three fourth of a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 27,200 (Sensex) and 8,200 (Nifty) bastions. Domestic bourses traded choppy for most part of the day’s trade as sentiments remained dampened on reported that India’s exports contracted for the 10th straight month by 24.33 per cent in September to $21.84 billion due to steep fall in shipments of petroleum productions, iron ore, and engineering goods. Also, there was some concern with the RBI releasing a report on the financial performance of non-government non-financial companies stating that Indian corporates as a whole saw their net profits fall 9.5 per cent in the first quarter of this financial year, though it was still better than the 12.5 per cent decline seen in the previous quarter. However, sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Some strength came with data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry that India's fuel demand in September rose at the fastest pace in more than a decade, providing further evidence of a pickup in industrial activity. Traders also got some encouragement with Finance Minister Arun Jaitley's statement that economic growth could top 7.5 percent in the current fiscal and macroeconomic indicators are positive with declining inflation and twin deficits under control. He also said that even when globally the economic situation is not that good, India's industrial and manufacturing output are showing improvement. Positive opening in European counters too supported the sentiments, Asian market too ended mostly in green. Back home, buying in auto stocks too supported the sentiments on hopes of higher demand during the festive season with most of them set to launch new models. Oil marketing companies viz BPCL, HPCL, IOC edged higher on hiking 95 paise in diesel rates. Finally, the BSE Sensex surged by 204.46 points or 0.76% to 27214.60, while the CNX Nifty soared by 58.65 points or 0.72% to 8238.15.