Markets to make a cautious but positive start; IIP data eyed

The Indian markets ended modestly in red in the last session, turning cautious ahead of the US employment report, today the start of the holiday truncated week is likely to be in green but cautious and traders will be eyeing the macro data scheduled to be announced through the week starting with factory output numbers later in the day. Traders will however, be getting some support with NITI Aayog Vice-Chairman Arvind Panagariya’s statement that India can become a $ 10 trillion economy in the next 15 years, from the existing $ 2 trillion, like China did in last one and a half decade. Also, credit rating agency Crisil in its latest report has said that revenues of companies in key sectors such as automobiles, IT services, power, steel products, telecom services, pharmaceuticals and FMCG are expected to grow 7 per cent in the July-September 2016 quarter, compared with a marginal 2 per cent in the year ago period. Meanwhile, Finance Minister Arun Jaitley has said that India is at the world’s centre stage more than ever before for "aspiring to do better in an adverse" environment, though he also cautioned that by its own yardstick, the country’s current growth rate is not enough. However, there will be some cautiousness too, as the World Bank in a new report has said that India, the world's largest remittance recipient in 2015, may receive a remittance of $ 65.5 billion this year, a drop of 5 percent due to weak economic growth in remittances-source countries and cyclic low oil prices.

The US markets ended modestly in red in the last session as the US employment increased by less than expected in the month of September. The Asian markets have made a mixed start as crude extended losses, Japanese market too was trading in red even though Bank of Japan chief Haruhiko Kuroda reinforced his commitment to unprecedented stimulus.

Back home, Friday’s trading session was of consolidation as market participants decided to hold back on big bets ahead of the US jobs data, which is expected to bolster the case for a US Fed interest rate hike. The session largely remained a bit choppy as the aimless indices moved only sideways in a tight band amid lack of triggers. Weak trend in global markets and depreciation in rupee value against dollar, also weighed on the sentiments. However, investors got some confidence with NITI Aayog Vice-Chairman Arvind Panagariya’s statement that India can become a $10 trillion economy in the next 15 years, from the existing $2 trillion, like China did in last one and a half decade. NITI Aayog is preparing a 15-year vision blueprint which will provide a roadmap for developing India into a big economic powerhouse with inclusive growth. Some support also came from IMF’s statement that India’s strong reform push in 2016 is welcome and should continue apace. Adoption of the goods and services tax is poised to boost India’s medium-term growth. It added that as shown by India, progress on reforms could ignite business investment (including already strong FDI inflows), further boosting domestic demand. On the sectoral front, Auto and oil-gas stocks witnessed some recovery from lower levels, while cement and power stocks faced resistance at higher levels due to profit booking. Information technology (IT) companies edged lower for third straight trading sessions on concerns of weaker earnings growth for Q2FY17 as the sector continues to face headwinds from muted global macro, BREXIT and transition of existing business to new technologies. Telecom stocks were also seen in action post the spectrum auction. Going forward, the markets is likely to be volatile in near term as investors are having high hopes from July-September quarter earnings, while many are expecting to see some turnaround in selected sectors. Finally, the BSE Sensex declined by 45.07 points or 0.16% to 28061.14, while the CNX Nifty dropped 11.95 points or 0.14% to 8,697.60.