Markets to make a soft-to-cautious start

The Indian markets suffered sharp setback in last session, with not only the benchmarks but broader indices too suffering big jolt on global growth concerns and dragged considerably down by a massive dip in exports. Big cracks in heavyweights like Reliance Industries too dampened the sentiments. Today, the start is likely to be soft-to-cautious and the spill-over effects of weak Chinese economy data is likely to be seen on the domestic markets too. Traders will remain cautious with  Reserve Bank of India Governor Raghuram Rajan's statement that implementation remains the major challenge for India's economy and if it can deliver on its promises the country will be 'the place to be'. Rajan has said that India needed to improve its infrastructure, human capital (knowledge base of the population), regulations and access to finance. The banking and financial stocks will see some action, as the RBI governor Raghuram Rajan and two of his deputies met with banks and other financial institutions on Monday to discuss stressed loans in the banking system. IT pack too will be in action with in line expectation HCL Tech numbers for December quarter and with the industry body Nasscom stating that the IT industry needs to look for 'new opportunities' amidst various problems and challenges facing the sector.

The US markets remained closed, unable to give any cues to the other global markets. The Asian markets have made a mixed start with some indices trading in red, weighed down by some weaker-than-expected Chinese economic data, while oil traded near a 12-year low. China’s GDP rose 6.8 percent in the three months through December from a year earlier; below than consensus estimate of 6.9 percent, also it was China's weakest since the aftermath of the 2008 global crisis.

Back home, Indian equity bourses commenced the fresh week on a depressing note as the benchmark indices extended previous week’s sell-off and sank by over a percentage point to the lowest levels since June 2014. Growing concerns about the growth of the world economy coupled with the relentless fall in the international crude oil prices has mounted pressure across the board on domestic markets. Sentiments remained down-beat with Niti Aayog member Ramesh Chand warning that the country's farm sector crisis is expected to deepen further in 2016-17 if the current trend of falling global commodities prices is not reversed.  He also pitched for more private sector involvement, reforms in land lease policy and easy market access, while emphasizing the need to train farmers with additional skills to get jobs outside farming to tide over the agricultural crisis. Besides, the data released by the government showed that India’s merchandise exports shrunk for the 13th straight month in December also weighed on sentiments. Reflecting the sluggish global demand, India's merchandise exports have contracted by 14.75 percent to $22.3 billion. Trade deficit during the month under review widened to the most since August to $11.6 billion as against $9.17 billion in December 2014. On the global front, Asian market ended mostly in red on Monday, tracking a sell-off on Wall Street over the weekend as discouraging US with decline in US retail sales and drop in industrial output in December. Back home, the benchmarks got off to a somber opening, extending the downtrend for the third straight session as pessimistic sentiments prevailed across Asian markets. The selling pressure accentuated in the late afternoon trades as investors took to across the board risk aversion. Moreover, the broader markets too failed to show any kind of fervor and plunged by over two and half percent, underperforming their larger peers by quite a margin. Finally, the BSE Sensex declined by 266.67 points or 1.09% to 24188.37, while the CNX Nifty lost 86.80  points or 1.17% to 7,351.00.