Markets to make another soft start, may see some recovery in latter part of trade

The Indian markets witnessed another down day in last session, with major averages losing around half a percent. Today, the start of the penultimate session of the F&O series expiry is likely to be in red tailing the soft global cues, however volatility is expected in latter part of the trade and some short covering upmoves too can be seen. Traders will be getting some encouragement with report that India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year. Meanwhile, the government has set up a high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws, a report that could form basis for tinkering with the controversial retrospective applicability of tax. Also, the Finance Minister Arun Jaitley, despite acknowledging disinvestment target challenging, has said that lower receipts will not upset the fiscal maths and there will be no difficulty in meeting the fiscal deficit target of 3.9 percent set for the current financial year. There will be some buzz in the gold and jewellary stocks on a private survey report that India regained its top position from China as the biggest overall consumer of gold in the first nine months this year with a total consumption of 642 tonnes. The fertilizer stocks too may see some action after Union Minister Piyush Goyal said that a presentation will be made shortly before Prime Minister Narendra Modi on manufacture of urea from coal.

The US markets continued the consolidation mood and ended lower again in last session, as traders cashed in on some of the recent strength in the markets ahead of the Federal Reserve's highly anticipated monetary policy announcement. The Asian markets too have made a soft start with most of the indices trading in red, though the Japanese market has bounced back with the weakening yen.

Back home, Tuesday’s trading session turned out to be a disappointing for the Indian equity markets which got pounded by one third of a percent amid weak global cues. Traders remained wary ahead of October series expiry in the derivatives segment on Thursday and Fed policy meet. After a negative opening, the domestic bourses never looked in recovery mood and extended the northward journey for second day in a row, breaching their crucial support levels of 27,300 (Sensex) and 8,250 (Nifty). Sentiments remained down-beat on report that foreign institutional investors (FIIs) have reduced their holdings in 19 blue chip firms that are part of the 30-share benchmark Sensex during July-September quarter as they recast their portfolio on account of several domestic and global factors. Traders also remained concerned after Minister of State for Finance Jayant Sinha said that government’s plan to cut its stake in state-run companies is 'challenging' as many of the companies are in the commodities sector where valuations have been hit by a downturn. It had been earlier reported that the government's divestment department wants to more than halve its divestment target for the current financial year to March to about Rs 30,000 crore. Meanwhile, Moody's Investors Services projecting Indian economy’s growth at 7 per cent in the current fiscal and 7.5 per cent in the next one has said that GDP growth and low oil prices will lead to higher fuel consumption over the next 18 months. Global cues too remained sluggish with European counters making a weak start, while  Asian equity indices too edged lower on Tuesday. Back home, investors failed to draw any sense of relief from Finance Minister Arun Jaitley’s statement that there is no cause for concern on fiscal deficit and the government will meet its target for the current fiscal despite certain challenges on the disinvestment front. Selling in metal counters too weighed down sentiments after latest data showed that profits earned by Chinese industrial companies fell 0.1% in September 2015 over September 2014. Finally, the BSE Sensex declined by 108.52 points or 0.40% to 27253.44, while the CNX Nifty lost 27.65 points or 0.33% to 8232.90.