Markets to get a cautious start on sluggish global cues

The Indian markets added gains in the last session and the major averages despite coming of the day’s high managed to retain their crucial levels. Today, the start is likely to be a bit cautious on somber global cues, though traders will be getting some support with global rating agency S&P projecting India to clock 8% growth over next few years and stating that India's structural reform agenda has maintained strong momentum and should propel growth higher. Traders will also be getting some support with the Finance Ministry setting at rest confusion over levy of excise duty and stating that there is no 'legal infirmity' in the notifications issued by the government with regard to the GST Constitution Amendment Act. Meanwhile, the country's long-period monsoon rainfall for the June to September period is heading for a 'normal' performance. In April this year, IMD, the country's state-run weather forecasting agency had said that the country is likely to receive above-normal rainfall, but with just ten days before monsoon comes to a close, the countrywide monsoon deficit stands at 5 per cent. Aviation stocks will be in action on reports that domestic air passenger traffic increased by 23.98 per cent during August to 83.81 lakh, further the data from Directorate General of Civil Aviation (DGCA) showed that the passenger traffic during January-August period grew by 23 per cent. The telecom stocks too will keep buzzing with reports that Seven telecom firms, which have applied to participate in the upcoming spectrum auction beginning October 1, have made earnest money deposit of Rs 14,653 crore to acquire rights to use spectrum in seven frequencies, lower than the deposit of Rs 19,711 crore in February 2015 auctions, when lesser bands were up for grabs.

The US markets continued their lackluster trade and ended modestly in red in the last session. Markets though moved higher in early deals on support of overseas markets strength but lost pace ahead of the Federal Reserve's monetary policy announcement later this week. The Asian markets have made mostly a lower start on decline in oil and amid countdown for the policy decisions by the Bank of Japan and the Federal Reserve.

Back home, the Indian equity markets witnessed a lack-luster and volatile day of trade on Monday after showing firm trend in Friday’s session. Uncertainty over monetary policies has helped reignite volatility in global markets as well as the local markets, with traders split over what action the BOJ will undertake in its review Wednesday, while bets on an interest-rate hike from the Fed this week remain somewhat strong as inflation data for August rose more than projected. Back home, investor got some comfort  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. some support also came with report that Finance Ministry officials are expected to pitch a ratings upgrade to Moody’s by stressing upon the various reform initiatives taken by the Narendra Modi government, including the GST, bankruptcy code, and inflation targeting through the monetary policy committee, among others. Meanwhile, good buying was observed in metal counters, as the Union Steel Minister Chaudhary Birendra Singh 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. Shares of select textile companies also gained traction on expectation of pick-up in sales in coming months in light of good monsoon, seventh pay commission payouts and festive season. Tyre manufacturers like MRF and Ceat jumped more than 6 percent each on expectation of a lower natural rubber prices that could improve the profit margin of tyre companies as it accounts around 40 percent of input cost. On the other hand, mild selling was witnessed in select pharma stocks on the report that the government slashed 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. Finally, the BSE Sensex ended up by 35.47 points or 0.12% to 28634.50, while the CNX Nifty gained 28.55 points or 0.33% to 8,808.40.