Markets to see some bounce back with a positive start

The Indian markets plunged again in last session after witnessing a modest recovery in the preceding one. Today, the good global cues are indicating a mild bounce back in early trade and the benchmarks are likely to get a positive start. Traders are likely to get some support with report that the government appears headed towards a breakthrough on getting states on board for a rollout of the goods & services tax (GST), on initiative of the finance minister Arun Jaitley after state finance ministers rejected the draft GST Constitutional Amendment Bill.  Also, there is good news from the revenue front, as the indirect tax collections rose marginally by 7.1 percent in the April-November period to over Rs 3.28 lakh crore, mainly on account of increase in revenue from service tax and customs. Meanwhile, a United Nations report too is likely to boost the morale of the investors, which has said that India's economic growth is expected to improve to 6.3 percent in 2016 with the country leading economic recovery in South Asia. Power sector is likely to be in action, as the power minister Piyush Goyal has said that the rationalization of coal linkages to power plants would help save Rs 6,000 crore. Sugar and PSU oil marketing companies too will remain buzzing, after centre raised the price of ethanol to be procured by oil marketing companies for blending with petrol by Rs 2 a litre.

The US markets bounced back and ended with modest gains in last session on getting better than estimated retail sales data and decline in jobless claims in the week ended Dec. 6.The Asian markets following the US footsteps have made an all green start led by the Japanese markets, which has surged ahead of the elections tomorrow.

Back home, Indian markets returned to their southbound journey on Thursday after a day of halt. Reeling under the global risk aversion pressure, the domestic markets witnessed wide based selling that dragged the bourses off their many crucial support levels. There were lots of encouraging domestic policy developments but traders remained concerned about the global growth scenario and some of the major macro economic data slated to be announced tomorrow. Rupee slipping to its nine months intraday low too weighed on the sentiments and led the markets end lower by about a percent for the day. The global cues remained weak and after a slump in the US markets overnight the Asian markets too followed the trend with all the major indices suffering cuts of half to one percent for the day. However, the European markets made a good bounce back and started in green after three days of losses. Back home, markets made strong recovery attempt in the second half but was met with equal resistance with profit booking. Traders remained concerned about the CPI and IIP data due to be announced tomorrow. Although there were some major policy announcements like the government approving various amendments to the Electricity Act, 2003 and 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) but they were unable to make any impact. There was another setback with reports that GST may not be tabled this Winter session of parliament, as CST issue may have been resolved but agreement is yet to be reached upon others such as inclusion of alcohol, tobacco and petroleum and states rejected government's proposals. Back on street, barring the healthcare most of the sectoral indices ended in red with oil & gas and realty suffering the most. The most striking was the considerable weakness in the IT stocks despite rupee plunging to multi month lows. Sugar stocks came into action after the government increased the procurement prices of ethanol by Rs 1 per liter and sugar industries are expected to see better realization with the decision. Finally, the BSE Sensex plunged by 229.09 points or 0.82%, to 27,602.01, while the CNX Nifty lost 62.75 points or 0.75% to 8,292.90.