Markets to make a slightly negative start on weak global cues

The Indian markets closed modestly in red in last session, showing a lack of direction. Today, the start is likely to be slightly weak again, tailing the sluggishness in the US markets after comments from Federal Reserve chair Janet Yellen boosted expectations of a US rate hike this month. Though, some recovery can be expected in latter part of the trade and the traders will be getting some support with a White House communique that  US President Barack Obama, has found Prime Minister Narendra Modi a politician who is honest and has a clear vision for India. Also, as Cabinet has given ex-post-facto approval to the easing of foreign direct investment (FDI) policy in 15 sectors that was approved by the Prime Minister Narendra Modi last month. Traders will be eyeing the Services PMI data, slated to re announced later in the day for some cues. Companies related to insurance business will be in action, on report that foreign direct investment in the insurance sector has more than doubled to $341.43 million during March-September this year. The stocks based in Chennai will continue to remain in pressure with deluge in the last two days impacting lots of IT and auto companies.

The US markets reversed all their previous session gains and ended lower, with major bourses showing considerable weakness over the course of the trading day on drop in oil and concerns about the outlook for monetary policy. The Asian markets have made mostly a weak start, the decline was led by the energy producers and mining stocks, with oil suffering sharp cuts and precious metals plumbing to multi-year lows.

Back home, Wednesday's session turned out to be a choppy day of trade for the domestic markets, where key indices got off to a positive start, but surrendered all their gains soon to languish into the negative terrain thereafter in the absence of any positive trigger. Though, some amount of recovery was witnessed in last leg of trade but it was not enough to pull benchmarks into positive trajectory. Traders remained concerned with Reserve Bank of India (RBI)-sponsored survey of professional forecasters stating that the retail inflation is likely to rise to 5.5 per cent in the last quarter of this fiscal and thereafter may moderate to 5.2 per cent by September 2016. Though, the forecasters expect real Gross Value Added at basic price (GVA) to increase by 7.4 per cent in 2015-16. Traders overlooked global ratings agency Moody's Investors Service’s statement that investment levels in India (Baa3 positive) are showing nascent signs of recovery, driven by an upturn in the capital replacement cycle, and increased public sector expenditure. Investors also failed to get any sense of relief from report that the FDI in the country grew by 13 percent to $16.63 billion during the April-September period of the current fiscal, compared to $14.69 billion during April-September 2014. However, losses remained capped on report that India’ s fiscal deficit for the first seven months of the current financial year narrowed compared to the same period a year ago, on account of higher tax revenue collections and despite high capital spend by the government to push economic growth. On the global front, European counters have made a positive start, while Asian markets ended mostly in red. Back home, investors were monitoring progress in the current session of Parliament as Prime Minister Narendra Modi's government seeks to pass its reform agenda, including a new goods and services tax. Selling in banking stocks too dampened sentiments, as the Reserve Bank of India Governor Raghuram Rajan has said that he expects bad debt-burdened banks to clean up their balance sheets by March 2017, warning the central bank would monitor whether concessions made to lenders were being misused. Finally, the BSE Sensex declined by 51.56 points or 0.20% to 26117.85, while the CNX Nifty lost 23.55 points or 0.30% to 7931.35.