Markets to make a week start on negative global cues

The Indian markets, coming off the day’s high slumped in last session. Today, the start is likely to be weak tailing the negative global cues, traders will be concerned about the global growth after the ECB’s stimulus announcement. Also, the US Ambassador has stated that problems related to ease of doing business such as taxation, regulatory burdens and legal issues can deter American investors from investing in India. The rating agency, Crisil in its latest report has said that India is unlikely to attain the ambitious target of doubling exports of goods and services to $900 billion by fiscal 2020 from $470 billion in FY15, mainly due to declining competitiveness of India Inc, infrastructure bottlenecks and labour market rigidity. However, there can be some bounce back in the latter part of the trade taking encouragement from Standard & Poor's Ratings Services projection of India's economy growing at 7.4 percent in the current fiscal, which will further improve to over 8 percent in 2016-17. Sugar stocks will be in action, on report that India's sugar production rose 24 percent to 23.60 lakh tonnes in the first two months of the current marketing year on higher output from Maharashtra. 

The US markets went for a toss in last session and major averages lost over a percent on concerns about the outlook for monetary policy. Traders reacted to comments from Draghi and Yellen. The former announced an extension of the ECB's asset purchase program until March of 2017, while the latter indicated that the central bank remains on track to raise interest rates later this month. The Asian markets too have made a soft start, with some of the indices trading lower by over a percent, reverberating ECBs stimulus decision.

Back home, Thursday turned out to be a disappointing session for the Indian equity indices which got pounded by over a percentage point as investors sold stocks across sectors amid worries that a hike in US interest rates would lead to capital outflows. After a cautious start, domestic bourses entered into red terrain and never looked in recovery mood and ended the trade near two intraday lows, breaching their crucial support levels of 25,900 (Sensex) and 7,900 (Nifty). Selling was both brutal and wide-based as, barring realty; none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included fast moving consumer goods, consumer durables metal and metal.Sentiments came under pressure after India’s services industry barely expanded in November, growing at its weakest pace in five months, as firms grew increasingly gloomy about the coming year. The Nikkei/Markit Services Purchasing Managers’ Index (PMI) fell sharply to 50.1 in November from October’s eight-month high of 53.2. Investors failed to draw any sense of relief from Standard & Poor's Ratings Services’ statement that India's economy will grow at 7.4 percent in the current fiscal, which will further improve to over 8 percent in 2016-17. The Asian Development Bank (ADB) too kept its economic growth forecast for India unchanged at 7.4 percent for the current financial year and 7.8 per cent for the next fiscal. On the global front, European markets traded in the green in early deals, while most of the Asian equity indices ended in red. Back home, traders overlooked government’s statement that the current regulatory framework on Participatory Notes (P-Notes) is strict and robust, hinting that there may not be any change required in the rules at the moment. The comments assume significance following the Supreme Court-appointed SIT on black money asking Sebi to review its regulations on P-Notes and identify their end-users. Depreciation in Indian rupee too dampened the sentiments. Finally, the BSE Sensex plunged by 231.23 points or 0.89% to 25886.62, while the CNX Nifty declined by 67.20 points or 0.85% to 7864.15.