Markets to make a cautious start after three consecutive days of gains

The Indian markets bouncing back from their early sluggishness, surged in last session on some upbeat earnings announcements. Today, the start is likely to be cautious on mixed global cues and traders will also be reacting to  global rating agency Standard and Poor’s ruling out any rating upgrade for India, though it said that improvement in policymaking have raised the country's prospect for economic and fiscal performance. However, not much downside is expected and traders will be getting some support with the monthly SBI Composite Index that has stated that country's manufacturing sector growth improved in October largely driven by the manufacturing sector, but mining and electricity are still acting as a drag on the economic activity. India Inc will also be reacting to Reserve Bank of India governor Raghuram Rajan’s statement who has called for a transparent and consistent taxation policy to ensure steady flow of capital for the government's ‘Make in India’ strategy. The telecom sector is likely to be in action on reports that the American Tower Corp (ATC) will announce its acquisition of telecom infrastructure company, Viom Networks, in the largest foreign direct investment (FDI) deal since coming of the new government. It has been reported that ATC will acquire 51 percent stake in the multi-tier deal at an enterprise value of Rs 20,000 crore. Companies engaged in insurance business too will be buzzing, as the IRDAI has issued guidelines on FDI in insurance firms.

The US markets ended higher in last session after a report of National Association of Home Builders said that homebuilder confidence in the US unexpectedly improved in the month of October. The Asian markets have made a mixed start on renewed anxiety over China stoking a selloff in commodities and a Federal Reserve official talking up the outlook for higher rates.

Back home, extending their winning streak for third straight session, Indian equity benchmarks ended the Monday’s trade with a gain of over half a percent with frontline gauges recapturing their crucial 27,300 (Sensex) and 8,250 (Nifty) levels. Markets traded choppy in initial trade, but hectic buying activity which took place during second half of trade mainly drove the markets higher. Sentiments remained up-beat 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.  Some support also came after the Department of Disinvestment (DoD) suggested tax incentives for small investors to attract more retail investors into the stock markets. Rally in Reliance Industries’ shares too aided sentiments with company reporting highest ever quarterly net profit of Rs 6,720 crore for three months ending September 30 on spike in refinery and petrochemicals margins. Firm opening in European counters too supported the sentiments, while Asian markets ended mostly in green. Back home, traders drew some encouragement with finance ministry’s announcement that it is seeking the views of foreign portfolio investors (FPIs) on measures to simplify the procedures and documentation for registration of FPIs in India. Appreciation in Indian rupee too supported the sentiments. Meanwhile, aviation stocks flied high after no-frills carrier IndiGo’s parent InterGlobe Aviation fixed the price band for its proposed initial public offer (IPO). The company has fixed the price band for its initial share sale at Rs 700-765, through which it could raise up to Rs 3,268 crore. Finally, the BSE Sensex surged by 150.32 points or 0.55% to 27364.92, while the CNX Nifty gained 36.90 points or 0.45% to 8275.05.