Markets to get a bounce back on supportive global cues

The Indian markets declined in last session amid concern of a rate hike by US Fed, today the start is likely to be in green and the local bourses too will get a bounce back tailing surge in other global markets. Traders will be getting some support with the Organisation for Economic Cooperation and Development's (OECD) bullish outlook for India, which in its interim economic assessment report has said that India is poised to grow 7.7 percent this year and 8 percent in 2016 to become the “fastest growing major economy.” There will be some buzz in the oil & gas sector  as the price of domestically produced natural gas is likely to be slashed by over 10 percent to $ 5.02 per unit from April 1, the first ever reduction in rates of the fuel. Some action can be seen in the aviation stocks too, as the civil aviation ministry, in an attempt to bring all airlines on board, has  tightened the eligibility criteria norms for flying international routes by increasing the domestic flying credits (DFCs) eligibility.

The US markets rallied in last session, reacting positively to the Fed’s monetary policy announcement, viewing its statement as dovish regarding the outlook for interest rates. Fed Chair Janet Yellen noted that removing the word patient from the statement doesn't mean the central bank is going to be impatient. The Asian markets have mostly made a positive start tailing the gains in US markets after Fed officials indicated interest rates will rise at a slower pace than previously forecast. However, the Japanese market was in red, as the yen strengthened against dollar.

Back home, resuming their southward journey, Indian equity benchmarks ended the Wednesday’s trade with a cut of around half a percent as investors remained on sidelines ahead of the outcome of the US Federal Reserve’s stance on interest rates at its two-day policy meet which ends today. Markets traded choppy throughout the session, though attempted recovery in afternoon deals but the recovery proved short-lived and markets ended the session below their crucial 28,700 (Sensex) and 8,700 (Nifty) levels. Sentiments also remained dampened as IMF chief Christine Lagarde has said that a possible interest rate hike by the US Federal Reserve could pose risks to market stability in emerging economies, including India, even if it is well managed by central banks. However, losses remained capped on the buzz of government approving the release of Rs 33,000 crore in tranches to states and Union Territories as CST compensation. As part of the roll-out of proposed Goods and Services Tax (GST) regime, the CST is being phased out and has been reduced to 2 per cent, from the earlier 4 percent. Some support also came in with a Crisil Research study showing that India’s household spending will rise by Rs 1.4 trillion or 2 percent in the next fiscal on the back of low fuel prices, benign food inflation and a rising income growth. Meanwhile, foreign portfolio investors were net buyers in equities to the tune of Rs 265.52 crore on Tuesday as per provisional stock exchange data. On the global front, European markets traded mostly in the red in early deals, while Asian markets ended mixed. Back home, software and technology stocks remained under pressure for yet another session of rupee’s strength. Additionally, stocks related to domestic two-wheeler took a hit following the drop in rural demand due to agrarian stressors such as unseasonal rains and hailstorms which have impaired the rural economy. On the flip side, metal shares rose amid expectations that China will announce further stimulus measures aimed at boosting economic growth. Finally, the BSE Sensex plunged by 114.26 points or 0.40% to 28622.12, while the CNX Nifty dropped by 37.40 points or 0.43% to 8,685.90.