Markets to make a flat-to-positive start of the new week

The Indian markets despite losing some strength posted good gains in the last session on hopes that US Fed may delay the rate hike in view of some weak economic reports. Today, the start of the new week is likely to be cautious but in green on positive regional cues. Traders will be getting some support with DIPP Secretary Ramesh Abhishek’s statement that implementation of the goods and services tax (GST) is bound to be a “game changer” for India's manufacturing sector and will enhance ease of doing business in the country. Meanwhile, the Confederation of Indian Industry (CII) has said that the factory inspection system needs a complete overhaul to bring India among the top 50 countries in terms of ‘ease of doing business’ in the next two years. CII in its white paper said that the excessive number of inspections in India weighs down on the competitive advantage and the ‘ease of doing business’ of Indian businesses. The pharma sector will be buzzing with government slashing prices of 10 more drugs while bringing eight new medicines, including paracetamol, under price control for the first time in its bid to cap cost of over 800 plus formulations to make them affordable. The steel stocks too will be in action, as the Union Steel Minister Chaudhary Birendra Singh has claimed that the country will be ranked after Japan and America in steel production in December this year as a result of the Prime Minister's various initiatives like Skill India, Startup India and Make in India. Apart from the secondary market there will be buzz from the primary market too, where the Rs 6000 crore IPO of ICICI Prudential Life Insurance will kick off. The first IPO by any insurance company which values the private life insurer at Rs 48,000 crore.

The US markets once again showed a lackluster trade and ended lower in last session, traders remained cautious ahead of the US Fed meeting and booked profit. The Asian markets have made a positive start with some of the indices showing strong trade, up by over half a percent in early deals, as oil rebounded, increasing risk appetite ahead of policy meetings this week by the Federal Reserve and the Bank of Japan.

Back home, the week’s last session turned out to be a volatile one as the Indian frontline equity indices went through a rollercoaster ride, through they managed to settle with gains of around half a percent. Sentiments remained jubilant in the first half of trade amid firm cues from Asia and overnight gains on Wall Street, but investors started booking profits after weak opening in European counterparts. Sentiments got some support with report that Prime Minister Narendra Modi targeting to roll out the ambitious GST on April 1 next year, has directed that all steps required in this direction should be completed before that date. He has also said that GST Council would need to have intensive meetings to be able to make timely recommendations relating to its mandate. Adding the confidence among market participants, Finance Minister Arun Jaitley expressed hope that the Reserve Bank will keep in mind the decline in retail inflation, while deciding on interest rates at its policy review meeting on October 4, 2016. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 345 crore on September 15, 2016. However, investors remained nervous with the exports declining for the second consecutive month in August by 0.3 percent to $ 21.51 billion due to dip in shipments of products like petroleum and leather. The imports too contracted by 14 percent to $29.91 billion, leaving a trade deficit of $7.67 billion in the month under review. Meanwhile, sugar stocks gained traction as sugar prices touched three-year highs due to strong demand from bulk consumers for the festive season amid millers selling at higher levels. Sugar prices also rose as data from the Brazilian cane industry group showed that production dropped more-than-expected during the second half of August. Finally, the BSE Sensex ended up by 186.14 points or 0.66% to 28599.03, while the CNX Nifty gained 37.30 points or 0.43% to 8,779.85.