Markets likely to make a cautious start

Indian markets are likely to make a cautious start amid negative cues from Asian peers and following an overnight mixed session in the US. The SGX Nifty, which was trading with modest gains of about 8 points, indicated that Nifty could open at 11,367. Among Nifty 50 companies, Indiabulls Housing Finance and ONGC are due to report their earnings today.  

Majority of Asian indices are seen trading in the red on Thursday. China’s Shanghai Composite is leading with a loss of 1.42 per cent, followed by Hong Kong stock market and Japan’s benchmark Nikkei 225 index, which have slipped 1.38 per cent and 0.39 per cent, respectively.  
  
Back home, key benchmark indices began the session on an optimistic note and, thereafter, the indices oscillated in a narrow range as market participants opted to remain cautious ahead of the RBI policy announcement. The selling pressured emerged after the RBI's monetary policy committee raised the repo rate by 25 bps to 6.5 per cent. As a result of this, key benchmark indices snapped their record-hitting spree and ended the day with modest losses. The broader markets showed resilience and ended the day in the green with Nifty Mid-cap and Small-cap adding 0.15 per cent and 0.03 per cent, respectively. On the sectoral front, it was a mixed performance with Nifty Pharma emerging as the top performing sector, while Nifty Auto and Nifty PSU Banks were the worst performers.  
 
The US stocks closed mostly lower on Wednesday. The tech-heavy Nasdaq Composite index bucked the trend and gained 35 points on the back of strong rally seen in the stock of Apple after it reported highest ever revenue for the three months ending June. Dow Jones Industrial Average slid 81 points to close at 25,334 and the S&P 500 dipped 3 points to finish at 2,813. The Federal Reserve, as widely expected, held back raising its key interest rates and indicated that it is likely to raise rates next month as the economy remains strong. On the economy front, the latest data on private-sector employment jumped by 219,000 jobs in July, well above the 178,000 that had been expected. Meanwhile, a report from the Institute for Supply Management showed a slowdown in the pace of growth in manufacturing activity in the month of July.  

The European indices ended the first day of trading for the month of August in the negative terrain. The DAX of Germany lost 0.53 per cent; CAC 40 of France weakened by 0.24 per cent and UK’s FTSE 100 declined 1.24 per cent. Going ahead, investors await the policy decision from the Bank of England.