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Markets likely to come out of their consolidation mood with a good start|The US markets closed higher overnight, while the Asian markets were trading mixed|

The Indian markets continued their consolidation mood in last session, lacking any further cues to move higher. However, the major indices managed to hold their crucial levels and added another about a quarter percent despite sluggishness in the global markets. Today, the start is likely to be in green and markets may come out of their consolidation phase. Markets are also likely to get some support with the buzz that the cabinet will approve bills that would raise the cap on foreign direct investment in insurance firms and open the pension sector to foreign investors. The telecom sector will keep buzzing after the Empowered Group of Ministers (EGoM) ratified department of telecommunications (DoT) decision on 100% foreign companies’ eligibility, now they can bid on their own without a partner. However, the EGoM after discussing issue of one time spectrum fee decided to take a final decision on it after receiving an opinion from the Attorney General and from the law ministry. The traders will also be eyeing the movement of rupee that has surged to its fresh five months high in last session. IT stocks may remain under pressure, partially due to strength in rupee and partially due to warning of a darker outlook for 2013 earnings by Hewlett-Packard. The UB group stocks will once again be in limelight, while the deal between Diageo and United Spirits is said to be in the last leg, on the same time talks between the Kingfisher Airlines management and its pilots, engineers failed, as the employees rejected the offer for part payment.

The US markets made a modest bounce back on Wednesday on stronger-than-expected US labor and service-sector data. The ADP private sector employment change report showed a rise in private payrolls in September, while Institute for Supply Management said that its headline services index in September grew at fastest pace in six months. The Asian markets after a steady start are showing some profit booking with Energy stocks receding, as oil traded near a two-month low. Japanese market has gained strength with the better than expected news from US.

Back home, equity markets in India extended their consolidation mood for yet another day; however, unlike most of their regional peers they managed to close marginally in green. The day remained range bound lacking any major supportive cues for the market, traders were cautiously waiting for the report from a high-level committee, headed by HDFC Chairman Deepak Parekh, scheduled to be submitted to Prime Minister Manmohan Singh on funding of infrastructure sector, the requirement of which has been estimated at close to $1 trillion during the 12th Plan period. Cement companies continued their rally on hopes for more infrastructure-related initiatives from the government and also on hopes for increased construction activity after the end of the monsoon season. There was cautiousness in the market after Reserve Bank of India’s deputy governor Subir Gokarn said that inflation remains stubbornly high and is a barrier to economic growth.

 The somberness also strengthened after ADB cut its growth estimates for India and said that growth in India is expected to hit 5.6% and 6.7% in 2012 and 2013, weaker than previous forecasts of 7% and 7.5%. Not only India, the Manila-based bank has cut most of its 2012 and 2013 growth estimates for developing Asia and said that euro zone's unresolved sovereign debt crisis and US fiscal cliff remain the biggest risks to the growth outlook of the developing nations. Traders avoided building positions in the blue-chips and selective buying was seen in oil & gas, PSU and FMCG stocks. While the broader indices kept their momentum going throughout the day and outperformed the benchmarks.

 On sectoral front, oil & gas remained the leader since morning, supported by gains in the market heavyweight RIL after it was reported that the company has sent a missive to the oil ministry that if government and Directorate General of Hydrocarbons don’t agree with the company 1.6 billion budgetary plan for FY12-13, it may lead to closure of the KG-D6 block in 2015-16. On the other hand Auto sector turned the laggard of the day and the monthly sales number was seen impacting the momentum of auto stocks. Finally, the BSE Sensex gained 45.78 points or 0.24% to settle at 18869.69, while the S&P CNX Nifty rose by 12.45 points or 0.22% to close at 5,731.25.