Markets to get a flat-to-positive start on mixed regional cues

The Indian markets, which was one of the few markets who traded on first day of the year, remained range bound and ended marginally down lacking any cues and weak participation from the traders. Today, the start is likely to be flat-to-positive; however traders will be cautious ahead of the HSBC Manufacturing PMI data to be released later in the day. India's manufacturing sector witnessed an expansion in November for the first time since July, driven by rising new domestic orders. There will be lots of sector specific movement today, the private sector bank may see some upmove on report that in the new bancassurance policy, private sector banks may be brought on par with their public sector counterparts and be allowed to sell policies of multiple insurers. The auto sector stocks may remain buzzing with full-year numbers released by some of the top car companies painting a grim picture for the sector. Aviation sector stocks too will see some action as the oil PSUs have increased the price of aviation turbine fuel (ATF) by 2.7%, the second consecutive hike in the past one month. Some of the power sector stocks too may see some action, as Comptroller & Auditor General (CAG) audit of private power distribution companies will start from today.

The US markets remained closed on Wednesday on account of New Year’s Day, unable to give any cues to the other global markets. The Asian markets have made a mixed start after a day of break. The Chinese market was trading weak as the manufacturing purchasing managers’ index for December came lower than last month.

Back home, first day of 2014 turned out to be a lackluster one for the Indian equity markets as the benchmark equity indices failed to hold on to their initial gains and settled the session slightly in the red. Frontline gauges traded in a very tight band throughout the session in the absence of overseas cues as all the major Asian as well as European markets remained closed on account of New Year. Domestic markets started the session on a positive note, supported by report that foreign institutional investors (FIIs) bought shares worth a net Rs 309.70 crore on December 31, 2013. While, the output of eight core sector industries grew 2.5% during April-November, showing signs of recovery. Core sector grew 1.7 per cent in November after shrinking 0.6 per cent in October, though it was much lower than 5.8 per cent growth last November.  However, markets started moving southward on report that India’s fiscal deficit in the April-November period reached 94% of the targeted budgetary estimate of Rs 5.42 lakh crore, raising concerns that India may well overshoot its ambitious target of containing the deficit at 4.8% of GDP. Some cautiousness also crept in after the retail inflation for industrial workers inched up marginally to 11.47 per cent in November compared to 11.06 per cent in October and 9.55 per cent in the same month last year due to higher prices of food items.  Sentiments also remained dampened after the Indian rupee continued trading weak due to dollar buying from oil importers. However, losses remained capped as some support came in after Commerce and Industry Minister Anand Sharma indicated that government will go for further liberalisation of the FDI policy in the coming weeks to attract foreign investments into the country. Besides, proposing 100 per cent FDI through automatic route in the cash-starved railway sector, the Department of Industrial Policy and Promotion (DIPP) has also proposed to de-license and de-reserve few areas of the sector. Stock related to realty sector remained on buyers’ radar, despite the Maharashtra government increasing the ready reckoner rates for Mumbai by 20 percent. Finally, the BSE Sensex declined by 30.20 points or 0.14%, to settle at 21140.48, while the CNX Nifty lost 2.35 points or 0.04% to settle at 6,301.65.