Markets to get a bounce back with a good start

The Indian markets in volatile last session pared all the early gains to end lower by around half a percent. Traders lacked any trigger and confidence to hold the gains. Today, the last session of the tumultuous week is likely to start in green, with markets getting support from the surge in the global indices after ECB president hinted at further stimulus for the euro region in March. Traders will also be getting some encouragement with a survey released on the sidelines of WEF Annual Meeting that has ranked India 22nd on an inaugural list of the world's best countries. About India, the report said the country faces its fair share of international and domestic challenges. Markets will also get some support with the UN's trade agency UNCTAD’s report that Foreign Direct Investment (FDI) flows into India nearly doubled in 2015, while the US emerged as the top host country for FDI last year. Meanwhile, Finance Minister Arun Jaitley has said that the Indian economy needs some multiple engines of growth, while the focus for the government now is on reviving private investments. Regarding the proposed Goods and Services Tax Bill pending in the Rajya Sabha, Jaitley has said that the GST legislation would go through as the numbers in India`s upper house of parliament will change favourably soon. Result announcements will once again keep the markets buzzing and scrip specific actions based on earnings will be seen.

The US markets ended higher in last session, though off their day’s high. Stocks regained ground after falling sharply over the past several sessions mainly on the back of bargain hunting and reacting to the latest monetary policy announcement from the European Central Bank. The Asian markets have bounced back with most of them showing good surge on prospect of an expansion in central bank stimulus. Japanese market has taken the lead following the dovish comments overnight from ECB president Mario Draghi and the rebound in oil prices.

Back home, it turned out to be a lackadaisical performance from the benchmark indices on Thursday as they failed to snap the session in the green territory and settled below the neutral line. Markets closed at their lowest level in 20 months due to risk aversion as crude oil resumed its slide and put pressure on Asian markets. Sentiments remained down-beat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1325 crore on January 20, 2016. Furthermore, weakness in rupee, too was weighing down the sentiments, which after a good start has breached the 68 per dollar mark. However, losses remained capped with Finance Minister Arun Jaitley’s statement that India is gradually transforming most of its taxation laws for a greater degree of stability and predictability. He also stressed that the proposed Goods and Services Tax (GST) is a major step in this direction. Moreover, with global headwinds hitting emerging markets as well, Finance Minister said volatility has become a global norm, but India can certainly grow at 8-9 per cent in a friendlier global climate. Some support also came with report that India is likely to remain an attractive destination for investors given its relative macro outperformance and the country is likely to clock a GDP growth rate of 7.5 per cent this fiscal.  On the global front, after getting a respite in the morning trades, Asian markets erased all their gains to end lower on Thursday, while European markets were oscillating between negative and positive zone in early deals. Back home, the benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices dropped into the negative terrain sooner than later, lacking any significant upside cues. The indices moved only sideways thereafter but touched intraday lows in noon session, tracking weakness in rupee. In late afternoon session, the indices tried hard to move back into the positive territory and even got there but only for a brief period as investors took the opportunity to cash in on the bounce back. The bourses finally extended the declining run for the second session but finished way above the session’s lows. Finally, the BSE Sensex declined by 99.83 points or 0.41% to 23962.21, while the CNX Nifty ended down by 32.50 points or 0.44% to 7,276.80.