Markets to make a cautious start ahead of Diwali

The Indian markets consolidated in the last session and traders took some profit off the table in a choppy day of trade. Today, the start is likely to remain cautious on sluggish global cues and traders will be reacting to mixed quarterly results of Wipro and Axis Bank, also as the markets will be closed on Thursday and Friday for Diwali, with Thursday just having one hour of Muhurat trading. Traders will be getting some encouragement with statement from statement of Surjit Bhalla, a member of the Prime Minister’s Economic Advisory Council that the government is likely to stick to its fiscal deficit target of 3.2 per cent of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalise banks. There will be some buzz in the export oriented stocks, as the Centre is considering an incentive package of over Rs16,000 crore to boost exports in view of sluggish domestic demand and competition in export markets. Steel stocks too may see some action as the Ministry of Finance imposed an anti-dumping duty on steel to cover colour-coated or pre-painted flat products of alloy or non-alloy steel. There will be some buzz from the primary markets too, as the non-banking financial company MAS Financial Services will make stock market debut today. The Rs 460 crore initial public offer (IPO) was oversubscribed 128 times.

The US markets moved further high in the last session in a choppy day of trade and Dow and the S&P 500 reached new record closing highs. Though, traders seemed reluctant to make more significant moves, as the earnings season is only just beginning to pick up steam. The Asian markets have made a mixed start and there was some cautiousness in the region as China’s President Xi Jinping spoke at the opening of the Communist Party Congress, with investors assessing the magnitude of recent gains in global equities.

Back home, Indian equity benchmarks witnessed consolidation with frontline gauges ending almost unchanged on Tuesday, as traders opted to book some of their profit after three days of continuous rally. Markets traded choppy through the session with frontline gauges swinging between green and red for most part of the day, as sentiments remained downbeat on geopolitical tension after North Korea’s deputy U.N. ambassador warned a nuclear war may break out any moment. Traders also remained on sidelines ahead of second quarter results from Wipro and Axis Bank, slated to be released later in the day.  However, traders took some solace with statement of NITI Aayog Vice-Chairman Rajiv Kumar, who has pitched for fiscal stimulus to boost growth with a rider that additional expenditure should be used only for increasing productivity and capital expenditure. He said that faced with slowing economic growth, the industry has been clamouring for a stimulus package from the government. Some comfort also came with the International Monetary Fund suggesting India to consider setting up an independent fiscal council, saying this institution has contributed to better outcomes in the countries where it has been introduced. Some support also came with Economic Affairs Secretary Subhash Chandra Garg’s statement that getting investment in the infrastructure sector and bankruptcy reforms are the two issues which are on the top of the government's agenda. Besides, the private report stating that India’s foreign reserves, which touched a record $ 402.5 billion in September, are high enough to cushion the country against the external vulnerabilities, also helped the indices to trade in green territory. Finally, the BSE Sensex lost 24.48 points or 0.08% to 32,609.16, while the CNX Nifty was up by 3.60 points or 0.04% to 10,234.45.