Markets to make a flat-to-cautious start

The Indian markets despite some late hour choppiness managed a positive close, ending higher by around half a percent in last session. Today, the last day of the week is likely to see a cautious but positive start, as the global cues are mixed and traders will prefer to remain on sidelines ahead of US employment data, also as the crude after a day of surge has lost momentum. There will be some cautiousness with a survey conducted by the Reserve Bank of India stating that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017. In general, a majority of the respondents expect prices to increase over the next three months and a year ahead. However, there will be some support to the markets with foreign direct investment (FDI) in the country more than doubling to about $ 4.5 billion in December 2015. In December 2014, India had received $2.16 billion. There will be some somberness in the IT sector stocks, with industry lobby group Nasscom reporting that Indian IT services exports are likely to grow at a slower pace next fiscal year than in the recent past as global clients rein in technology spending. There will be lots of earnings announcements too, to keep the markets in action.

The US markets ended the choppy session on modestly positive note, as traders kept a close eye on the price of crude oil, which showed some wild swings as the day progressed, while traders were reluctant to make any significant moves ahead of the release of the Labor Department's monthly jobs report on Friday. The Asian markets have made a mixed start, with some of the indices trading in red led by Japanese market which has lost over a percent after the yen strengthened against the dollar which was down on bets that the Federal Reserve will hold interest rates unchanged this year.

Back home, Indian equity benchmarks snapped three-day losing streak as investors opted to buy beaten down but fundamentally strong stocks amid positive global cues. It was a volatile session of trade for Indian equity markets where domestic gauges started with a gap-up opening and traded with traction in early deals as traders took some relief with Finance Minister Arun Jaitley amid global uncertainty saying that it is important for India to emerge out of the crisis stronger as it is on a much higher and stabler footing than other nations. Jaitley said that India is ‘relatively unimpacted’ by some of the factors that have caused the global crisis.  However, markets pared most of their gains in second half of trade after reports stated that the US government has made it mandatory for all active pharmaceutical ingredients (APIs) to be manufactured locally. But, domestic gauges regained momentum in dying hours and ended the session with a gain of over half a percent with frontline indices recapturing their crucial 7,400 (Nifty) and 24,300 (Sensex) levels. Global cues remained supportive with European counters making a firm opening, while Asian markets too ended mostly in green. Closer home, appreciation in Indian Rupee too aided sentiments. Buying was witnessed in metal counter as traders went for short covering. Moreover, copper prices rose in global commodities markets too helped some stocks in the space. Shares of oil exploration and production companies edged higher on gain in crude oil prices. On the flip side, pharmaceutical stocks remained under pressure after the United States government reportedly made it mandatory for Active Pharmaceutical Ingredients to be manufactured locally. Aviation stocks tumbled after sharp rebound in crude oil prices. Finally, the BSE Sensex surged by 115.11 points or 0.48% to 24338.43, while the CNX Nifty gained 42.20 points or 0.57% to 7404.00.