Markets to make a cautious start on sluggish global cues

The Indian markets after a choppy trade lost their momentum in the final hours and made a modestly lower close in last session. Today, the start is likely to be cautious tailing mixed global cues. Trade will get impacted and essential services such as banking, public transport and telecom may be hit as 10 central trade unions (CTUs) will go on one-day nationwide strike against government's “indifference” towards their demands and effecting “anti-worker” changes in labour laws. Markets, however will be getting some support with Odisha becoming the 16th state to ratify the constitutional amendment bill passed by Parliament to introduce the goods and services tax (GST), helping cross the important threshold of more than half the number of states needed for the proposed law to be sent for presidential assent. There will be some buzz in the retail and FMCG stocks, as Niti Aayog member Amitabh Kant has said that the government is in favour of framing a single policy for retail, FMCG and e-commerce to harmonize the existing varied policies. Sugar stocks may come under pressure, as to check spiraling price of sugar which has crossed Rs 40 per kg, the government imposed stock limits on sugar mills during the festival season till October-end. Telecom stocks too will be in action with price war back in space after the official launch of Reliance Industries RJio.

The US markets once again showed a lackluster trade and made a flat closing in last session, as traders continued to look ahead to the Labor Department's monthly jobs report due Friday, which is expected to show an increase of about 175,000 jobs in August. The Asian markets have made a mixed start, though the losses are modest and the Chinese markets were trading higher, while all eyes are on the non-farm payrolls data from US.

Back home, bout of volatility in last leg of trade dragged the Indian benchmarks slightly lower on Thursday and stock markets witnessed consolidation after three days of rally, as investors lacked conviction to open fresh positions. Key gauges made a cautious start and oscillated in an extremely tight range in first half of trade with India’s economic growth rate slipped to 6-quarter low of 7.1 percent in April-June, as compared to 7.9 percent in the previous quarter, mainly due to subdued performance of mining, construction and farm sectors. The economy had expanded at 7.5 percent in the April-June quarter of last financial year, 2015-16. Sentiments were also weighed down with the Core Sector growth slowing to 3.2 percent in July, compared to 5.2 percent recorded in June. However, the cumulative growth of the sector during April-July period of the fiscal was 4.9 percent. Meanwhile, fiscal deficit in the first four months of the current financial year reached to Rs 3.93 lakh crore, or 73.3 percent of the Budget estimates for 2016-17. Markets regained momentum in second half  of trade with report of manufacturing sector growth touching a 13-month high in August, bolstered by expansion in new works as well as acceleration in buying and production levels. The Nikkei India Manufacturing PMI jumped to 52.6 in August from 51.8 in July as “Indian manufacturers enjoyed a solid improvement in operating conditions” last month. But, sharp wave of selling in final hour of trade dragged markets lower and local bourses ended the session slightly in red. On the global front, European markets were trading mostly in green in early deals, while Asian markets ended mostly in red. Back home, depreciation in Indian currency dampened sentiments. Telecom stocks witnessed selling after Reliance Industries announced the launch of Reliance Jio with disruptive pricing strategy in addition to voice calls and national roaming free of cost. Finally, the BSE Sensex shed 28.69 points or 0.10% to 28,423.48, while the CNX Nifty slipped 11.55 points or 0.13% to 8,774.65.