Indian Market Likely To Stay In Consolidation Mood

S&P BSE Sensex fell on yesterday after nine days of gains on profit-booking and weak global cues and rise in crude oil prices dampened market sentiment, which led to selling pressure across sectors. In the longest straight nine-session winning streak of the year 2014, the index had zoomed by 825.65 points or 3.14%. The Sensex closed 0.20%, or 54.01 points, lower at 27,085.93 points, while Nifty shed 0.23%, or 18.65 points, to end at 8,095.95 points.

NDA government has called a meeting of all state governments on Sept. 12 regarding 100 smart cities in the country. On the development of Andhra Pradesh and the newly-created state of Telangana, the Centre will support both states and there will be no partiality towards any one of them.

Globally, U.S. stocks reversed early gains to end lower on yesterday, giving the S&P 500 its third decline in a row. Modest losses for stocks followed a slump in oil prices and came ahead of a U.S. jobs report due Friday that could affect the Federal Reserve's easy-money policies. Stocks started the day higher after the European Central Bank surprised investors by announcing that it had cut its benchmark interest rate to a record low and planned to buy asset-backed securities in an effort to stimulate Europe’s ailing economy. The S&P. 500 index fell 3.07 points, or 0.2%, to 1,997.65. The Dow Jones industrial average fell 8.70 points, to 17,069.58 points. The Nasdaq composite index dropped 10.28 points, or 0.2%, to 4,562.29.

European markets rallied on yesterday after the European Central Bank’s surprise decision to cut interest rates. The Stoxx Europe 600 Index rose 1.1% to 348.89 at the close, the highest level since July 3. Germany’s benchmark DAX 30 index closed up 1.02%, France’s CAC 40 index jumped 1.64% and Italy's FTSE MIB market closed up 2.85%.

The euro fell against the dollar and the pound today. Sterling climbed 0.96% to stand at euro 1.264. The euro sank to a 14-month low against the dollar, hitting $1.2957 and breaking below the key technical resistance point of $1.30. Although the euro later pared losses to trade at $1.2971, it was still off 1.4%.

Asian equity indices open mixed trand. Japan’s Topix index added 0.21% after the yen weakened to an October 2008 low. Hong Kong stocks dipped 0.2% and Shanghai Composite is trading with gains of 0.44%. A SGX Nifty Index future is trading at flat with decline by 0.07% to 81129. Today we expect Indian equities likely to stay in consolidation mood. However, PSU OMCs will gain on falling crude oil prices. We expect a flat opening for Indian equities today.