Markets to get a gap-down start on weak global cues

The Indian markets slumped in last session, suffering cuts of around a percent on weak global and domestic cues, apart from the worries of Fed’s rate hike, traders remained concerned about various reform measures once again getting stuck in the parliament. Today, the start of the new week is likely to be weak, tailing the sell-off in the other global markets, though traders may react to a better than expected industrial production data announced after the market hours on Friday, still there will be volatility ahead of the November wholesale and consumer price inflation data scheduled for release later in the day. Meanwhile, India's industrial output grew at five-year high rate of 9.8 percent in October, a significant rebound from 3.84 percent growth recorded in September 2015 and a contraction of 2.7 percent in October last year. However, CEA Arvind Subramanian has said that one has to be careful while interpreting the data, as the spike could be on account of Diwali purchases. Services sector stocks are likely to remain in action on report that FDI inflows into the services sector grew by about 20 percent to $1.46 billion (Rs 9,404 crore) in the first six months of the current fiscal. The steel sector too may continue buzzing as the ministries of Commerce and Steel are close to finalizing the minimum import price of about 30-35 steel products, which is likely to be announced this week.

The US markets suffered sharp sell-off in the last session as the crude continued its decline, while the retail sales data came lower than expected, further dampening the sentiments ahead of the crucial week. The Asian markets have made an all red start tailing the weakness in US markets, some of the indices are down by over a percent amid growing anxiety over this week’s Federal Reserve interest-rate decision.

Back home, resuming their southward journey, stock markets in India capitulated by around a percent on Friday, after showing signs of relief in yesterday’s session, as jittery investors lacked conviction to build positions ahead of key economic data - industrial production (IIP) numbers for October - to be released later in the day. Though, the Indian industrial output is forecasted to rise 7.8% annually in October, its strongest pace in more than three years and much faster than the 3.6% seen in September. The benchmark indices suffered hefty bouts of profit booking especially in rate sensitive counters and got dragged around the psychological 7,600 (Nifty) and 25,000 (Sensex) levels. Investors failed to draw any sense of relief with United Nations’ (UN) projection that India to record a 7.3 percent economic growth in 2016 and 7.5 percent in 2017. It also stated that India will continue to be the fastest growing economy in the world in 2016 and 2017 amid volatile global financial conditions that will see diminished trade flows and stagnant investment. Sentiments also remained dampened over a possible delay in the passage of the key GST Bill. Markets extended losses after European counters made an awful start, while Asian markets ended the session mostly in red. Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. Selling in banking counter too played spoil sport for the markets, as the rating agency Fitch has said that credit growth of banking sector may moderate further in the current financial year as worsening asset quality coupled with capital constraints were acting as impediments. Stocks related to Auto space too remained under pressure after the National Green Tribunal (NGT) said that no new diesel vehicles should be registered in Delhi, and directed the Centre and the Delhi government not to buy any diesel vehicles for their departments. There was some buzz in the cement stocks after Competition Appellate Tribunal setting aside Rs 6,316.59 crore penalty imposed on 11 cement firms by CCI on cartelisation charges asked the fair trade regulator to hear the matter afresh. Finally, the BSE Sensex plunged by 207.89 points or 0.82% to 25044.43, while the CNX Nifty declined by 72.85 points or 0.95% to 7610.45.