Markets may see a gap-down start on feeble global cues

The Indian markets despite a choppy trade sensed some relief in last session and ended modestly higher. Today, the start is likely to be soft once again on feeble global cues and Sensex may breach the 27800 support levels in very early trade. There will be buzz in the India Inc. as the Finance Minister Arun Jaitley will meet his state counterparts to iron out the challenges in rolling out the Goods and Services Tax (GST). The Centre is working towards rolling out the GST from April 1, 2016, and is in discussion with states to insulate their revenues from the impact of the GST. Meanwhile, Industry body CII has said that the government should announce measures like removal of anomalies in customs duty, reduction in CST rate, rationalisation of CENVAT credit scheme, among others in the forthcoming Budget. The power stocks are likely to be in action,as the government has approved various amendments to the Electricity Act, 2003, to usher in major reforms in the sector. Tea stocks too are likely to remain buzzing, as the government has approved the proposal for implementation of the 'Tea Development and Promotion Scheme' with an outlay of Rs 1,425 crore during the the 12th Plan period (2012-17).

The US markets suffered sharp plunge in last session as oil once again tumbled to its fresh five years low after OPEC said it expects demand for crude next year to be the lowest since 2003.The Asian markets have made a weak start and some of the indices are down by over a percent in early trade, taking cues from the US markets, while the Chinese market was showing slight resistance the Japanese market has declined after the yen surged, capping its biggest three-day gain versus the dollar.

Back home, Indian indices witnessed some respite on Wednesday after suffering sharp slump in last two back-to-back sessions. Though, choppiness persisted but traders went for value buying and lapped up fundamentally strong shares at lower levels. Traders seems to have taken some cue from international credit rating agency Moody's report that Indian economy is expected to pick up pace in 2015 and grow in the range of 5-6 per cent, helped by strong domestic demand. It also projected that corporates would see improved cash flows on account of acceleration in manufacturing activity. Asian markets ended mostly in green on Wednesday, the Shanghai Composite Index gained around 3 percent, rebounding after yesterday’s sharp plunge, while the European markets too rebounded from their biggest slide in more than seven weeks made a good start. Back home, although the trade remained choppy lacking any major trigger but major indices traded in tight range and hardly showed any signs of sell-off, finally ending slightly higher from their previous close. Broader indices were in comparatively better position and outperformed the benchmarks since beginning. There was some buzz in the gold and jewellery related stocks on report that the government may announce changes as early as this week to a rule mandating so-called star trading houses export 100 percent of their gold imports. There was separate report that gold import in November spiked up on import restriction curb concern. Metals stocks, especially steel remained in limelight, as the World Trade Organisation (WTO) ruled against the US which had imposed high duty on imports of certain steel products from India and said that duty measures imposed by the US against India's certain hot rolled carbon steel flat products are inconsistent with various provisions of ASCM. The companies having interest in insurance business surged after a Parliamentary Committee recommended a composite foreign investment cap of 49 per cent in the insurance sector and supported a government Bill to amend the Act. Max India was up by over 5%, while Reliance Capital gained over 4% and Exide Industries was up by around 2%. One another non sectoral gauge that was in action was of NBFC after RBI deputy governor SS Mundra said that the central bank may grant licences for setting up small finance and payments banks by April, 2015. Finally, the BSE Sensex gained 34.09 points or 0.12%, to 27831.10, while the CNX Nifty added 14.95 points or 0.18% to 8,355.65.