Markets to get a positive but cautious start lacking any major cues

The Indian markets consolidated in last session but still managed a close in green, there was some profit booking in bluchips that had surged in last few session, while the rupee volatility too weighed on the market sentiments. Today, the start of the crucial data heavy day is likely to be positive but cautious and markets will keep consolidating, lacking any firm cues from the global markets too. Traders will be waiting for the IIP data for the month of July to be announced after the market hours, which despite being in contraction mood is likely to come better than last month’s figure of -2.2 percent. There is another important data of the index of consumer price inflation which too may come marginally lower in August, as compared to 9.64 per cent registered in the month of July. However, there will be concern with another downgrade as ratings agency Crisil has cut India's economic growth estimate to 4.8 percent for the current fiscal and said agriculture is the only hope for higher rate of expansion in this period of downturn. The power sector is likely to remain buzzing with Power Ministry approaching the Cabinet Committee on Economic Affairs (CCEA) proposing about Rs 11,000 crore payout to subsidise costlier power arising from rising gas rates.

The US markets made a mixed closing after a choppy trading on Wednesday, traders preferred to remain on sidelines with the ongoing uncertainty about the situation in Syria. The Asian markets have made a cautious start with Japanese markets leading the losers pack on report that country’s machinery orders accelerated less than expected and as investors await the outcome of the Federal Reserve’s meeting next week.

Back home, a day after showcasing a stupendous rally of around four percent, key domestic benchmark witnessed consolidation with both the frontline indices just to keeping their head above water, in an extremely volatile session on Wednesday. Buying which emerged in late trade, largely supported by appreciation in rupee against dollar, mainly acted as saving grace for domestic equity markets and helped Nifty to re-conquer its crucial 5,900 mark, while Sensex shied away from 20,000 mark. Earlier, markets made a shaky start as investors opted to book some of their profit in early deals after recent rallies. Traders also remained on sidelines ahead of August inflation numbers, inflation likely edged up to a sixth-month high in August, driven by higher food prices and as the battered rupee made key imports such as fuel costlier. Choppy start in European counterparts too dampened the sentiments as most of the indices traded in red in early deals after US President Barack Obama deferred a Congressional vote on military action against the Syrian government. Back home, benchmarks witnessed sharp recovery in last leg of trade, supported by decent pull-back in Indian rupee due to dollar sale by exporters and Foreign Institutional Investors (FIIs) investing in domestic markets. The rupee was trading at 63.24 per dollar mark at the time of equity markets closing as compared with previous close of 63.84 per dollar. Some support also came in after Prime Minister's Economic Advisor (PMEAC) C Rangarajan assertion that India’s economy is likely to grow at around 5.5 percent this fiscal. The PMEAC Chairman said special emphasis was being given on production and capacity-creation in some key infrastructure sector that lies in the public domain. Investors moral also got boosted after Securities and Exchange Board of India (SEBI) was said to be planning to come out with notifications to minimise the know your customer (KYC) requirement for FIIs that have established a strong track record of compliance with Indian rules. Meanwhile, banking stocks remained on buyers’ radar with latest initiative of the Reserve Bank of India (RBI), where it said that banks can borrow from overseas market up to 100% of their unimpaired Tier I capital as at the close of the previous quarter, with an upper limit of $10 million. Shares of metal companies too remained in limelight on back of stronger-than-expected retail and industrial growth in China, the world’s largest user of the metal. Finally, the BSE Sensex ended tad higher by 0.36 points to settle at 19997.45, while the CNX Nifty gained 16.40 points or 0.28% to end at 5,913.15.