Nifty flat; HDFC, Reliance positive contributors to Sensex

The Sensex is down 89.85 points or 0.32 percent at 27970.09, and the Nifty down 18.15 points or 0.21 percent at 8632.15.

About 1241 shares have advanced, 1316 shares declined, and 175 shares are unchanged. 

The market is absolutely flat with Sensex is up 11.44 points at 28071.38, and the Nifty is 8.65 points at 8658.95. About 1283 shares have advanced, 1238 shares declined, and 191 shares are unchanged. ITC, BHEL, Cipla, Axis Bank and Dr Reddy's Labs are top gainers while Adani Ports, Wipro, Infosys, NTPC and Tata Steel are top losers in the Sensex.

Even as many analysts believe that the Indian markets are among the most attractive in the world, thanks to the country's strong growth potential, Sanjay Mookim, India Equity Strategist at Bank of America-Merrill Lynch, is more circumspect.

 In an interview with CNBC-TV18, Mookim said the share rally recently seen was mostly driven by liquidity sloshing around globally and that with valuations becoming pricey, investors should adopt a more cautious tone.

 "We haven't distinguished ourselves by way of earnings," he said, even as he expects profits to rise about 15 percent this fiscal. The brokerage has a Sensex target of 26,000, predicated on a price-to-earnings multiple of 15.5 times.

Nifty holds 8650; IT stocks weak, FMCG & pharma stocks up

While there are 10 more days to go before Urjit Patel is passed on the baton at Reserve Bank of India by Raghuram Rajan, the government is building a case in favour of a rate cut arguing the cost of credit in the country is very high. 

At an event a few days ago, Transport and Infrastructure Minister Nitin Gadkari said cost of funding was very high in India and that he hoped for a 2 percent rate from the Reserve Bank, a call that was re-iterated today by Commerce Minister Nirmala Sitharaman. Leading economists, however, believe this is just wishful thinking as the Ministry of Finance and RBI have already agreed on an inflation target and unless inflation comes off, there is no room for a rate cut.

The market is still sluggish as the Sensex is up 68.99 points or 0.2 percent at 28128.93. The Nifty is up 23.90 points or 0.3 percent at 8674.20. About 1384 shares have advanced, 816 shares declined, and 156 shares are unchanged. 

ITC, Cipla, Axis Bank, BHEL and Dr Reddy's Labs are gainers in the Sensex while Adani Ports, Wipro, Infosys, TCS and NTPC are losers in the Sensex. 

Crude prices dipped on Thursday as brimming US and Asian fuel inventories returned investor attention to a large global supply overhang, cutting short a price-rally and restricting Brent crude futures to below the USD 50 a barrel mark. 

Traders said price falls this week had truncated a rally that pushed crude up by more than 20 percent earlier in August on talk of a potential deal by oil producers to freeze output in an effort to rein in oversupply.

 Hopes of a deal were dampened by record output from the Organisation of the Petroleum Exporting Countries (OPEC) and little prospect of voluntary restrictions.

Opening Bell - Nifty above 8650 mark

At 9:15 AM, the S&P BSE Sensex is trading at 28,104 up 44 points, while NSE Nifty is trading at 8,669 up 19 points.

Asian markets are trading mixed. Nikkei 225 is trading in red, while Shanghai Composite and Hong Kong's Hang Seng are trading lower. Market-wide rollovers to the September F&O series were above average while rollovers for Nifty futures so far have been much higher than the past three series. Bank Nifty rolls have been lower so far and some action is anticipated here. Few global developments like North Korea testing another missile and Turkey launching attacks on Syria have once again brought in the tension factor. The only thought now on investors’ minds seems to be about what the Fed is likely to do in September. Yellen’s speech at Jackson Hole tomorrow may provide some clues.

Wall Street closed lower on Wednesday. The Dow Jones industrial average closed 0.35% lower, at 18,481.48. The S&P 500 fell 0.52% and the Nasdaq dropped 0.81%, to 5,217.69.

The Cabinet Committee on Economic Affairs approved nine projects worth about Rs.24,000 crore in nine states for expansion of railway network and connectivity across the country. The Union cabinet on Wednesday approved a revised India-Cyprus tax treaty that seeks to plug loopholes used by investors to avoid paying taxes in India.

BSNL announced a national unlimited 3G mobile data plan for Rs.1,099 and doubled the data usage limit in some existing plans.

The rupee opened marginally higher by two paise at 67.08/$ against US Dollar Thursday as against the previous close of 67.10/$. In currency markets, traders will remain on the sidelines ahead of Yellen’s speech. Amid the slew of hawkish remarks from various Fed officials, it has become imperative for the investors to hear from horse’s mouth.