Markets to make a cautious start, may recover in latter trade

The Indian markets suffered sharp slump in last session and the major averages lost over a percent on global jitters, with investors shunning stocks and bracing for a potentially pivotal US presidential debate. Today, the start is likely to remain cautious on weak global cues. Investors are also looking ahead to the Reserve Bank of India's rate-setting meeting on October 4 amidst the backdrop of declining retail inflation. However, traders may get some support with statement of Ravindra Dholakia, one of the three government appointees to the newly formed Monetary Policy Committee (MPC) that there will be no tug of war in the MPC. Meanwhile, the tax department just within the week after the first meeting of the GST Council, has came out with three draft rules and their formats relating to registration, invoice and payments which would be finalised by week-end. There will be some buzz in the oil & gas sector stocks on Moody's Investors Service’s report that  India's petroleum consumption will grow at 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. The telecom space too will be in action, as the Telecom Regulatory Authority of India (TRAI) has raised concern over high rate of call failure between the networks of newcomer Reliance Jio Infocomm and other telecom companies.

The US markets plunged in last session and the tech-heavy Nasdaq pulled back further off the record closing high set last Thursday, with traders looking ahead to highly anticipated presidential debate. The Asian markets have made a mixed start with some indices trading marginally in red, though the Chinese markets was in green albeit modestly, as industrial corporations jumped the most in three years, adding to evidence of continued stabilization in manufacturing and boosting prospects for their ability to repay debt.

Back home, Monday turned out to be a daunting session for the Indian equity indices, which got pounded by over a percentage point on feeble global cues. After gap-down opening, the domestic bourses never looked in recovery mood and continued moving northward to end at intraday lows, breaching their crucial support levels of 28,300 (Sensex) and 8,750 (Nifty). Investors were anxiously waiting the upcoming monetary policy review on October 4, the first to be held under newly appointed Reserve Bank of India (RBI) Governor Urjit Patel, amid expectations of a 25 basis point cut in the repo rate. But, market participants failed to get any sense of relief with RBI Governor, Urjit Patel downplaying the risk of inflation and harping on the focus on growth. Patel reportedly said that the GST regime would not harden inflation and the growth objective will remain part of the newly constituted MPC's mandate. Traders also shrugged off Niti Aayog Vice-Chairman Arvind Panagariya’s statement that a good monsoon, reforms and timely decision making at the Centre will definitely push India’s growth beyond the 8 per cent mark in subsequent quarters of this fiscal. Selling got intensified after European counters made a feeble start on Monday, as investors trod cautiously ahead of an Organization of the Petroleum Exporting Countries (OPEC) producers meeting in Algeria this week. All the Asian markets ended in red terrain, as investors’ attention turned from central banks to American politics ahead of the first US presidential debate.  Back home, selling was both brutal and wide-based as most of sectoral indices on BSE ended in red terrain. Finally, the BSE Sensex declined by 373.94 points or 1.30% to 28,294.28, while the CNX Nifty dropped 108.50 points or 1.23% to 8,723.05.