The Indian markets ended marginally in red in last session after the trade turned choppy in the final hours. Today, the start is likely to be cautious and markets may consolidate further tailing the sluggishness in the global cues. Though, there will be volatility too, as it will be the penultimate day of the F&O November series expiry, due to trading holiday on Wednesday. Traders will also be cautious ahead of the start of winter session of Parliament on Thursday and all eyes will be on development on GST. Meanwhile, Minister of State for Finance Jayant Sinha has said that a high-powered committee to suggest revenue neutral GST rate will submit its report in the first week of December. The ailing metal sector stocks may get some support with Finance Minister Arun Jaitley stating that government is considering “proactive steps” to improve the health of steel and aluminium sectors which are reeling under the impact of decline in global prices. The PSU banking stocks too will keep buzzing, as the FM has said that non-performing assets of Indian banks were at an ‘unacceptable’ level but the situation is expected to improve as the government and the central bank were taking steps to relieve stress in various sectors.
The US markets closed modestly lower in last session offsetting the strong upward move seen last week, the trade remained lackluster on report showing that existing home sales pulled back by a little more than expected in October. The Asian markets have made a mixed start, with lower commodity prices continuing to weigh on resources stocks. Japanese market too was witnessing marginal cuts as trading resumed after a long weekend. Traders in the region were also concerned with Fed Chair Janet Yellen stating that she expects policy will be tightened “gradually” after the initial increase.
Back home, Indian equity benchmarks ended the volatile day of trade slightly in the red as investors remained on sidelines ahead of expiry of November derivative contracts on Thursday. Selling in last leg of trade mainly dragged the markets lower. Sentiments remained downbeat on reports that overseas investors have pulled out more than $1billion from the Indian capital markets since the beginning of the month due to lacklustre quarterly earnings and concerns over a possible rate hike by the US Federal Reserve. Also, expressing concern over slowdown in the pace of reforms, global rating agency Standard & Poor's has said that India's rating could come under stress if government fails to pursue reforms agenda and overshoots fiscal deficit target. However, losses remained capped as some support came with former governor of RBI C Rangarajan’s statement that Indian economy will slightly perform better this year as the productivity level of capital may remain high. Though the growth rate of economy will be somewhere around 7.5 percent, the productivity of capital is less than investment growth and should catch up. Further, the markets will closely watch the winter session of Parliament, beginning this week, which sets the agenda of the government. NDA's recent reverses in Bihar elections have put a cloud over the pace of reforms, and market participants fear that it won't be smooth sailing in Parliament. On the global front, European counters traded in red in early deals, while Asian markets ended mostly in red. Back home, depreciation in Indian rupee too dampened the sentiments. Banking stocks remained buzzing with Finance Minister Arun Jaitley meeting with public sector bankers for a review of their performance so far. The major thrust areas of review was said to be Priority Sector lending, Quarter-2 results, Financial Literacy, PMMY and Insurance and Pension schemes. Finally, the BSE Sensex declined by 49.15 points or 0.19% to 25819.34, while the CNX Nifty lost 7.30 points or 0.09% to 7849.25.
