Markets to continue the good run with a positive start

The Indian markets bucking global trend went for a humongous rally in the last session with benchmarks hitting their one and half year high. Today, the start is likely to be in green on positive global cues, though some consolidation too can be seen after the big rally. Meanwhile, Prime Minister Narendra Modi has said that the country's priority will be to work towards trade facilitation agreement (TFA) for services, a move that will help in movement of professionals. There will be some buzz in the agriculture and irrigation related stocks on reports that India’s apex rural-development bank National Bank for Agriculture and Rural Development (NABARD) will manage a Rs. 77,000-crore corpus as part of a Central government push to complete 99 unfinished irrigation projects across the country by 2019, and bring water to 76.03 lakh hectares. In the next 15 days, Nabard will raise about Rs 6,000 crore (through private placement) and then on lend it to the Central Government for the funding of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). The PSU oil marketing companies too may see some action as global oil prices inched lower with market participants remaining skeptical that producers will reach an agreement to freeze output.

The US markets coming out of a long weekend made a modestly positive close in last session on report from the Institute for Supply Management showing that service sector growth slowed to its lowest rate in over six years in the month of August. The Asian markets are mostly higher in the early deals on expectations that the US Federal Reserve will refrain from raising interest rates at its September meeting. However, the Japanese market was trading in red on strength in yen against dollar and other major currencies.

Back home, Boisterous benchmarks showcased an enthusiastic performance on Tuesday, by rallying over one and a half percentage point amid strong global cues. Sentiments remained up-beat since start as key bourses made a gap-up opening and there appeared not even an iota of profit booking in the session as the bourses managed to fervently gain from strength to strength, as investors continued accumulating fundamentally strong stocks. Frontline indices not only ended the session near intraday high levels but also recaptured their crucial 8,900 (Nifty) and 28,900 (Sensex) bastions on hefty across the board buying. Sentiments remained up-beat on expectation of further delay in interest rate hike by the US Federal Reserve on account of slower than expected US jobs data in August. Traders also took some encouragement with report that growth in India’s service industry accelerated to its fastest pace in more than 3-1/2 years in August, driven by a surge in domestic and foreign demand. The Nikkei/Markit Services Purchasing Managers’ Index jumped to 54.7 in August, its highest since January 2013, from 51.9 in July. Reports that Prime Minister's Office (PMO) will soon clear projects worth Rs 20 lakh crore, too aided sentiments. Moreover, Project Monitoring Group (PMG) has already cleared 276 projects worth 10 lakh crore which were stalled due to various reasons including roads, environment, coal and power among others. Global cues too remained supportive with European counters making a positive start, while Asian markets rallied. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Markets got some support with surge in Indian rupee against the US dollar on selling of the American currency by exporters and banks amid sustained foreign fund inflows. Finally, the BSE Sensex surged 445.91 points or 1.56% to 28,978.02, while the CNX Nifty gained 133.35 points or 1.51% to 8,943.00.