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Morning cues: Nifty likely to see some recovery today

Nifty failed to hold the 8000 mark on Tuesday as bulls turn cautious ahead of the FOMC (Federal Open Market Committee) outcome today.

Intense selling pressure weighed on broader markets yesterday with the mid and the small cap indices falling nearly 4 percent. However, with global markets more optimistic on the Fed outcome, it may be a day for some recovery on Dalal Street today.

It was the worst fall for the market in the last 45 days after the Sensex tanked over 320
to close around 26493 and the Nifty was down 109 points to 7933.

Also, Chinese President Xi Jinping arrives in Ahmedabad today for a three day visit, making it only the third time when a Chinese President is visiting India. Apart from contentious issues like international boundary and incursions, both nations are likely to focus on avenues to boost commerce and investment.

The landmark civil nuclear deal to source uranium from Australia is just the beginning in a new era of Indo-Australian ties and the Australian state of Queensland wants in on the action. In an exclusive chat with CNBC-TV18, Parag Shirname, the trade commissioner of Queensland, says he expects Indian companies to soon sign deals worth USD 70-80 billion.

Global cues

Wall Street climbs higher on reports that the Fed is going to keep “considerable period” in its statement. Stocks jumped, lifting the Dow industrials to a record, as oil and other commodities surged on a report that China’s central bank would increase stimulus and on the view that the Federal Reserve would not rush to hike rates.

Market turned decisively higher on a Wall Street Journal’s report which made the argument that the Fed would keep its “significant underutilization” of labor market resources in its expected statement today.

In Europe, shares closed lower with investors looking ahead to a key Federal Reserve policy meeting as well as a referendum on Scottish independence. In Scotland, concerns regarding the upcoming vote are likely to curb risk sentiment in the near term.

Currency space

The US dollar nursed modest losses ahead of the Fed decision. According to traders, sellers emerged after the WSJ’s Fed watcher said the US central bank may keep the words “considerable time” in its policy statement.

Commodity watch

Brent crude prices steady around 98 dollars per barrel on the prospect of an open production cut as well as on a weakening dollar and news that Libya had curbed output after rockets hit an area near a refinery.

Gold prices hold steady around 1235 dollars an ounce ahead of the FOMC decision.

Stocks in focus

JSW Steel yesterday confirmed that it was in talks to acquire some assets of Lucchini, Italy’s second largest steel plant by capacity. If the deal goes through, it will mark JSW’s foray into the European market. It has also confirmed buyout talks with Ilva.

Lupin signs an agreement with Merck Serano to expand across emerging markets. The stock is expected to gain from this news.

GAIL board will mull borrowing limit up to Rs 2,000 crore today. The company is mulling entering deal with RGPPL for use of its Dabhol LNG terminal for 25 years.

Aurobindo Pharma gets USFDA approval for Amoxicillin for oral Suspension. Amoxicillin is a pencilin based antibiotic.

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