Markets to open flat on weak global cues

Domestic markets are expected to open the new week positively but investors remain cautious due to weak global cues and ahead of the result season.

According to market experts, benchmark indices will move in a narrow range ahead of RBI monetary policy (October 8) and Q2 result season. TCS will be the first major company to declare it quarterly result on October 8.

Vinod Nair, Head of Research at Geojit Financial Services, said, “the RBI is scheduled to announce its monetary policy this week. The Central Bank is expected to maintain its accommodative stance to maintain adequate liquidity in the system and to support economic activity. India’s service PMI is also due to be released.”

The market is showing some signs of correction after a stellar run as global markets are shaky amid worries of inflation and slowdown.

SGX Nifty at 17,560 indicates a 30-point gap up opening for Nifty futures, which on Friday closed at 17,530.20. However, Asia-Pacific stocks give a mixed signal, as Japan and Hong Kong bemchmarks tumbled over one and two per cent. On the other hand, Australian and Chinese markets are up close to one per cent while Taiwan markets are down marginally. The US markets, overcoming a series of selling, closed higher on Friday.

"The market will have an eye on the global data to get further direction. On the domestic front, we don't have many negative cues but it will be important to listen to the commentary of RBI's governor in the upcoming policy scheduled on October 8 where what he says about inflation will be important," said Santosh Meena, Head of Research, Swastika Investmart.

"Though the broader market outperformed last week, the IT sector, the leader of this bull run witnessed sharp profit booking. If the leader of the bull run starts to correct first then there is a risk of the near-term top in the market but we have to look for more clarity from here," said Santosh Meena.

"TCS will announce its Q2 earnings on the same day, probably post-market closing where we know that it will be another quarter of strong earnings for the IT sector but most of the projections are priced in and the market has started to worry about attrition rate and margin pressure due to wage hike," he further said.

Mohit Nigam, Head - PMS, Hem Securities, said: “Going forward, markets could witness action in IT stocks ahead of upcoming results while auto could show recovery from these levels as the festive season kicks in. Pharma also looks to be another corner on the basis of technical grounds,” he added.

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