Markets to get a strong rebound on good global cues

The Indian markets suffered sharp sell-off in the last session on global concern and the benchmarks slipped below their crucial psychological levels. Today, the start is likely to be strong and the markets will witness recovery tailing the good global cues. Traders after overlooking the spate of policy change announcements of last session will be taking their move after deliberating on them. The Cabinet Committee on Economic Affairs (CCEA) has approved a 10 per cent stake sale in Coal India, an initial public offering at Cochin Shipyard and a five-year interest subsidy scheme to boost sagging exports. CCEA also empowered the National Highways Authority of India (NHAI) to revive 34 stalled projects. Export oriented stocks will especially be in action as the government has announced 3 per cent interest subsidy scheme for exporters. Traders will also be getting some support with, Chief Economic Adviser Arvind Subramanian’s statement that inflation is completely under control and it is well within the target of the Reserve Bank. Traders will be eyeing the report of 7th Pay Commission which is scheduled to be announced today and is likely to recommend a 22-23 percent jump in the salary and allowances of the central government employees. The recommendations of the 7th Pay Commission are scheduled to take effect from January 1, 2016. The sugar sector stocks will continue their jubilation after the government decided to give a production-linked subsidy directly to cane growers. The government will pay sugarcane growers Rs 4.50 per quintal for the cane they will sell to loss-making millers.

The US markets rallied in last session with minutes of the Fed's recent meeting providing some clarity on the prospects of a December rate hike. The Asian markets have made a green start, recovering from the last session losses with the Federal Reserve meeting minutes stressed the pace of any rate increases will be slow after reaffirming faith in the world’s biggest economy.

Back home, Wednesday turned out to be a disappointing session for the Indian equity indices which got pounded by around one and a half percentage point, as investors sold stocks across sectors amid global growth concerns. The barometer gauges traded near the neutral lines till noon deals but a sharp wave of selling, which emerged in last leg of trade, dragged the major indices below their crucial 7,750 (Nifty) and 25,500 (Sensex) levels. Selling was both brutal and wide-based as none of sectoral indices on BSE, except consumer durables, were spared. Counters, which featured in the list of worst performers, include software, banking, technology and metal. Sentiments remained dampened on report that India's exports declined for the eleventh month running in October, highlighting the stiff competition faced by the country in a weak global economy. Traders even overlooked some big ticket reform measures by the government, as the union cabinet approved 10% stake sale in Coal India, initial public offer of Cochin Shipyards, approved 3% interest subsidy for exports, while empowered roads ministry to revive 34 stalled projects by appropriate measure. Global cues too remained sluggish with European counters making a weak start, while the Asian markets ended lower as copper prices tumbled. Back home, sentiments remained downbeat, while selling in metal counter too dampened the sentiments due to fall in commodity prices across the globe. Stocks related to power sector ended lower after losing early gains, with Ministry of Power planning to call bids for two domestic coal-based ultra mega power projects next month and two more by March 2016. On the flip side, shares of aviation companies ended higher, erasing their early morning losses, after Jet Airways, IndiGo and SpiceJet said they would pursue legal steps against Competition Commission of India’s (CCI) order imposing penalties totalling Rs 258 crore on them for anti-competitive practices related to air cargo. Finally, the BSE Sensex plunged by 381.95 points or 1.48% to 25482.52, while the CNX Nifty declined by 105.75 points or 1.35 % to 7731.80.