Markets likely to get a cautious start of new week and month | Asian markets are trading in red, while the US markets closed lower on Friday|
The Indian markets remained in jubilant mood on the last trading day and added another about a percent to their gains for the month. Today, the start is likely to be on a cautious note, while the global cues are not supportive; traders will be eyeing few macro data and government’s actions to keep the markets buzzing. Marketmen will be closely watching the Purchasing Managers Index data to be published later in the day for cues on the economy.
Also, there will be monthly auto sales data to show the health of the auto companies in the month of September, while the Cement companies too will be announcing their sales and despatches number. The Parthasarathi Shome panel, looking into the taxation issues relating to GAAR (General Anti-Avoidance Rules), is likely to submit its final report to Finance Minister P. Chidambaram today and apart from the domestic investors the foreign investors too will be watching this development.
While, there will be some buzz on the Kelkar Committee report which was submitted after the market hours last weekend, the Kelkar report painted a grim picture on the fiscal deficit front and has said that unless immediate correctives, such as a drastic cut in the subsidy bill are effected, the fiscal deficit would mount to an unmanageable 6.1 per cent of GDP in 2012-13. However, the Union food ministry is likely to oppose the Kelkar Commission's recommendation to prune the subsidy bill.
Also, there will be monthly auto sales data to show the health of the auto companies in the month of September, while the Cement companies too will be announcing their sales and despatches number. The Parthasarathi Shome panel, looking into the taxation issues relating to GAAR (General Anti-Avoidance Rules), is likely to submit its final report to Finance Minister P. Chidambaram today and apart from the domestic investors the foreign investors too will be watching this development.
While, there will be some buzz on the Kelkar Committee report which was submitted after the market hours last weekend, the Kelkar report painted a grim picture on the fiscal deficit front and has said that unless immediate correctives, such as a drastic cut in the subsidy bill are effected, the fiscal deficit would mount to an unmanageable 6.1 per cent of GDP in 2012-13. However, the Union food ministry is likely to oppose the Kelkar Commission's recommendation to prune the subsidy bill.
The US markets closed lower on Friday, though the economic news remained mixed but the concerns of the Europe debt crisis led the markets lower. The Asian markets have made a soft start, though the Chinese market along with few others are closed today but report that Chinese manufacturing contracted a second month for the first time since 2009 was weighing down the sentiments in the region.
Back home, first day of a fresh futures and options series brought more cheer for the Indian stock markets as the benchmark indices not only climbed over a percent higher in the session but also hit their highest level in more than 14-1/2 months. After the gap-up opening, the frontline gauges managed to capitalize on the momentum and kept garnering from strength to strength to reclaim the important psychological 18,750 (Sensex) and 5,700 (Nifty) bastions.
The undertone remained upbeat on optimism that the government will carry on its reforms agenda forward in the coming days and weeks. Corporate confidence also improved on the back of slew of reforms announced by the government lately. Sentiment also got support on government’s decision of no extra borrowing in the current year. The finance ministry asserted its commitment to containing fiscal deficit by sticking to its borrowing target and said that government will borrow Rs 2 lakh crore in the remaining period of the current fiscal to stick to the target of 5.1 per cent of the Gross Domestic Product. The appreciation in rupee too buoyed the sentiments, rupee rose to a near five-month high on Friday after the government stuck to its fiscal second half borrowing and said it will not borrow more via bonds in the current year.
The rupee rose to a high of 52.55, a level not seen since May 1. However, investors booked some profit after the release of core sector number, as eight core industries grew at a slower pace of 2.1 percent in August, against 3.8 percent in the same month last year due to negative growth in crude oil, natural gas, fertilizer and cement. Meanwhile, drug makers saw some selling pressure after the Group of Ministers (GoM) recommended revised pricing mechanism under New Pharma Pricing Policy, which suggests that the pricing cuts are worse than expected. But, domestic bourses held their crucial levels as buying in auto space continued to provide strength, gaining by about two percent as companies from this sector will start unveiling vehicle sales data for September from October 1, 2012. Cement shares extended their recent rally triggered by hopes that construction activity will pick up as the southwest monsoon started withdrawing from some parts of the country.
The undertone remained upbeat on optimism that the government will carry on its reforms agenda forward in the coming days and weeks. Corporate confidence also improved on the back of slew of reforms announced by the government lately. Sentiment also got support on government’s decision of no extra borrowing in the current year. The finance ministry asserted its commitment to containing fiscal deficit by sticking to its borrowing target and said that government will borrow Rs 2 lakh crore in the remaining period of the current fiscal to stick to the target of 5.1 per cent of the Gross Domestic Product. The appreciation in rupee too buoyed the sentiments, rupee rose to a near five-month high on Friday after the government stuck to its fiscal second half borrowing and said it will not borrow more via bonds in the current year.
The rupee rose to a high of 52.55, a level not seen since May 1. However, investors booked some profit after the release of core sector number, as eight core industries grew at a slower pace of 2.1 percent in August, against 3.8 percent in the same month last year due to negative growth in crude oil, natural gas, fertilizer and cement. Meanwhile, drug makers saw some selling pressure after the Group of Ministers (GoM) recommended revised pricing mechanism under New Pharma Pricing Policy, which suggests that the pricing cuts are worse than expected. But, domestic bourses held their crucial levels as buying in auto space continued to provide strength, gaining by about two percent as companies from this sector will start unveiling vehicle sales data for September from October 1, 2012. Cement shares extended their recent rally triggered by hopes that construction activity will pick up as the southwest monsoon started withdrawing from some parts of the country.
Finally, the BSE Sensex gained 183.24 points or 0.99% to settle at 18,762.74, while the S&P CNX Nifty rose by 53.80 points or 0.95% to close at 5,703.30.
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