Markets to make a soft start extending the decline on weak global cues

The Indian markets suffered setback in last session on some weak earnings report and the benchmark indices lost around a percent. Today, the start of the F&O expiry day is likely to be in red with markets following the footsteps of their Asian counterparts. The trade though may turn volatile in the latter hours as the traders will cover their shorts and rollover to next series. Traders may get some support with report that Prime Minister Narendra Modi has asked secretaries at the Centre and chief secretaries in the state to analyse the World Bank's Ease of Doing Business Report. Meanwhile, Union minister Nirmala Sitharaman expressing disappointment at India's rank remaining low in terms of ease of doing business has said that the efforts and reforms undertaken by the Centre and states have not been adequately captured in the ranking released by the World Bank. Market will also be reacting to Finance Minister Arun Jaitley’s statement, who talking in favour of levy of cess on tobacco and luxury products to compensate states for loss of revenue on Goods and Services Tax (GST) said that the cost of funding otherwise through a higher tax rate would be “exorbitantly high and almost unbearable”. The Tata group shares will continue to remain in focus as the leading bourses, the National Stock Exchange and Bombay Stock Exchange, have issued notices to a number of the Tata Group's companies, seeking a clarification on ousted Tata Sons' chairman Cyrus Mistry's claims that the conglomerate faced a $18-billion writedowns, or reduction in value of assets. There will be lots of important result announcements too, to keep the markets in action.

The US markets made a mixed closing in last session as traders weighed a flurry of earnings news, including downbeat results from Apple and Southwest. The Asian markets have made mostly a lower start weighed down by weakness in the US markets overnight and slump in the oil prices.

Back home, Indian benchmarks extended the declining streak for the second successive session as funds and retail investors turned jittery tracking a sluggish global trend due to tumbling oil prices. Oil prices came under pressure after a rise in US crude inventories and as hopes that OPEC will find a deal to cut production faded. Market participants around the world also remained nervous given the US election next month, the Federal Reserve's policy meeting in December, and over the health of China's economy. On the domestic front, sentiments were undermined by the report that India has moved up only one rank on the World Bank’s ease of doing business ranking this year, a disappointing result for the Narendra Modi government that made several initiatives and has set itself a target to break into the top 50.  The Doing Business 2017 report showed that India was placed 130th among 190 countries that had been surveyed for the annual rankings, with Russia, Bhutan, South Africa, China, Nepal, Sri Lanka and Brazil ranking higher. In the ranking, India has made a substantial improvement in some areas such as electricity connection, but slippage in other areas, including payment of taxes and enforcing contracts, prevented improvement on the rankings that is followed widely by global investors. Furthermore, amidst concerns for wide trade deficit with China, India’s engineering exports are fast losing a huge Chinese market, falling by annualised 57% in September 2016 reflecting subdued demand in some of the core sectors like non-ferrous metals. For the cumulative period of April-September, 2016, India’s engineering exports to China dropped by a sharp 45% to $584.10 million over $1.06 billion in the first half of the previous fiscal. Besides, disappointing earnings by some heavyweights and sustained selling by FIIs too dampened the trading sentiments. Axis Bank's quarterly net profit plunged 83% in the September quarter, while IDBI Bank reported a 53% decline in quarterly net profit. However, losses remained capped with the Economic Affairs Secretary Shaktikanta Das’s statement that the GDP growth will be around 8 percent this fiscal, while the agriculture sector is expected to grow over 4 percent. Finally, the BSE Sensex declined by 254.91 points or 0.91% to 27836.51, while the CNX Nifty dropped 76.05 points or 0.88% to 8,615.25.