The Indian markets consolidated in last session, dismal Services PMI data too weighed on the sentiments and traders opted to book profit. Today the start is likely to remain cautious and lacking any US cues traders will now be concentrating on the domestic earnings season, officially starting later this week with the Infosys numbers. The whole IT bunch will be in action ahead of the guidance of the IT behemoth, also there is report that a slew of regional banks In US are looking to outsource more technology work than ever before and Indian software services exporters are set to gain additional business from their largest market. Traders will remain cautious as a study by CII Ascon has shown that industrial growth in the three months ended 30 September remained dismal despite the government introducing a number of reform measures to boost the economy. There will be some buzz in the power sector, as the Power Ministry has asked the Coal Ministry to consider converting short-term coal supply pacts into long-term linkages for power plants that could not start output at captive mines in the absence of approvals.
The US markets taking the government shut-down in stride moved higher on Friday, there was neither economic data release nor any solution to the budget deal impasse despite President Obama’s effort. The Asian markets have made a mixed start and the Japanese market was down by over a percent as US lawmakers wrangled over the debt limit and partial government shutdown.
Back home, Indian equity benchmarks snapped the extremely volatile day of trade on an absolute flat note on Friday, as investors remained on sidelines ahead of start of the result session next week. During the session, the psychological 20,000 (Sensex) and 5,950 (Nifty) levels proved as stern resistances for frontline gauges, as despite couple of attempts the key indices could not clear those levels and ended flat. Earlier, benchmarks made a positive opening with foreign institutional investors (FIIs) turning big buyers in Indian equities amid easing concerns over funding India’s current account deficit and waning fears of Fed tapering. Some support also came in from appreciation in Indian rupee against dollar. But, markets gave up all their initial gains after getting a dismal Services PMI data. The services sector, which occupies the largest share in the Indian economy, contracted at the steepest pace since March 2009, according to the widely-tracked HSBC Purchasing Managers’ Index (PMI) report. The services PMI continued to contract for third time in a row in September and stood at 44.6 points from 47.6 points in August, when it was the lowest since March 2009. Global cues too remained sluggish with the US markets continuing their tepid run. Back home, markets once again gained strength and recaptured their positive terrain supported by buying in shares of automobiles companies which traded jubilantly for third day in row after reporting a better-than-expected monthly sales numbers in September and expectation of near term improvement in volume trajectory led by festive season. Moreover, stocks related to consumer durables sector too traded gracefully after the government said public sector lenders will offer cheaper loans to stimulate demand for struggling sectors. Additionally, shares of three public sector oil marketing companies viz. BPCL, HPCL and IOC edged higher as a strong rebound in rupee against the dollar eased concerns of higher cost of crude oil imports. However, benchmarks for a second time pared all their gains as some profit booking at higher level was witnessed in late trade, as investors’ opted wait and watch approach ahead of result session next week. Finally, the BSE Sensex added 13.88 points or 0.07%, to settle at 19915.95, while the CNX Nifty declined by 2.40 points or 0.04% to settle at 5,907.30.
