Markets to make a cautious start on mixed global cues

The Indian markets snapped the gaining streak and ended with modest losses in last session with traders booking profit in late hours. Today, the start is likely to be cautious as the global cues are not very supportive. However, traders will be getting some support with a US Treasury Department report that amid weaker outlook across emerging market economies India's recovery has strengthened under a new reform agenda, since it is not a large importer, however, it is not yet a major driver of global growth.” Meanwhile, foreign portfolio investors (FPIs) have urged the finance ministry to clarify on the tax treatment of investments in rupee-denominated bonds issued overseas, the guidelines for which were issued by the Reserve Bank of India (RBI) in September. Aviation stocks once again will be cheering with a report that domestic air traffic posted a 15 percent increase last month, as airlines carried 6.67 million passengers when compared with 5.82 million in September 2014. There will be lots of scrip specific actions based on the earnings announcement and the auto sector will be in limelight after two wheeler market leader HeroMoto Corp beating expectation posting 1.1% rise in September quarter standalone profit despite subdued revenue growth and lower other income.

The US markets ended modestly in red following a lackluster trading in the last session, on mixed batch of earnings report and as traders seemed uncertain about the near-term direction of the markets following recent volatility. The Asian markets have made mostly a cautious but positive start, as Chinese shares extended gains and traders pushed back expectations on the timing of the Federal Reserve’s interest-rate increase.

Back home, Tuesday’s turned out to be a choppy day of trade for the domestic markets, where key indices ended the volatile session marginally in red due to profit-booking by investors after recent gains. Immense volatility characterized trading whereby benchmark equity indices kept altering between green and red terrain throughout the session. Selling which came during late hours of trade mainly dragged the benchmarks lower. Sentiments remained dampened after global rating agency Standard & Poor's kept India's sovereign rating at the lowest investment grade of ‘BBB-minus’ and a ‘stable’ outlook, saying factors such as its sound external position were offset by low income and weak public finances. The agency added it does not expect to change its rating this year or in 2016 based on its current set of forecasts. S&P said any rating improvement would require reforms that ‘markedly improve’ the government's fiscal position and bring net general government debt below 60 percent of GDP. However, losses remained capped as some support came 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. Meanwhile, traders were eyeing the Finance Ministry two-day interactive meetings on October 20-21 with foreign portfolio investors (FPIs) and domestic market participants, aimed at ensuring ease of doing business in the financial market. On the global front, European counters traded in red after a positive start, while Asian markets ended mostly in green. Back home, depreciation in Indian rupee too dampened the sentiments. Stocks related to metal counter continued to remain under pressure for second day in a row after a raft of subdued economic data in China. Shares of oil exploration firms too edged lower after global crude oil prices skidded. Finally, the BSE Sensex declined by 58.09 points or 0.21% to 27306.83, while the CNX Nifty lost 13.40 points or 0.16% to 8261.65.