Markets to get a soft-to-cautious start on weak regional cues

The Indian markets after a choppy session and some attempt of recovery in the final hours ended modestly in red in last session, the positive macro data helped the markets from declining further. Today the start of the new week is likely to remain cautious and a mildly soft start can be expected on weak regional cues, though all eyes will be on earnings season and WPI inflation data slated to be announced later in the day. Market heavyweight Reliance Industries (RIL) will be announcing its Q3 numbers and expectations are that it will likely post good sequential growth in standalone net profit for the quarter ended December 2016. Traders will be eyeing any development on GST front, as Finance Minister Arun Jaitley in order to ensure smooth passage of GST, will look forward to breaking the deadlock over power distribution between centre and states in the ninth meeting of GST Council. Marketmen may get some support with report that exports jumped for the fourth month to 5.7 per cent in December to $23.8 billion, the highest since March 2015. As many as 18 of the 30 exporting sectors registered growth. The public sector banks (PSBs) will be in action on report that the Finance Ministry is likely to finalise capital infusion plan for PSBs this week. There will be some buzz in the PSU oil marketing companies, as the Petrol price has been hiked by 42 paisa a litre and diesel by Rs 1.03 per litre by the state oil companies.

The US markets made a mixed closing in last session before going for a long weekend. The Asian markets have made mostly a lower start with some indices showing cut of around a percent in early deals. Haven assets demand increased across the region on a report that U.K. Prime Minister Theresa May will signal plans to quit the European Union’s single market to regain control of Britain’s borders and laws.

Back home, it turned out to be a lackadaisical performance from the Indian equity indices on Friday as they failed to snap the session in the positive territory and settled marginally below the neutral line. Marketmen looked to consolidate their position in the session after rocketing around two percent in the week gone by and they largely indulged in stock specific activities amid a weak global trend. Sentiments remained dismal with the private report indicating that India’s GDP growth numbers are expected to see a decline of 2% in the third and fourth quarters of the current fiscal, as effective currency in circulation has contracted significantly. The report stated that the government’s decision to abolish old stock of high denomination currency (demonetization) and issue new notes (remonetisation) could have a mixed impact on the macro economy over a year. Besides, depreciation in rupee value also weighed on the sentiment. However, losses remained capped with report that the Index of Industrial Production (IIP) rose to a 13-month high of 5.7% in November, belying expectations of an adverse impact from demonetization and against a contraction of 1.8% in October. Also, the Inflation measured by the Consumer Price Index (CPI) eased to 3.41% in December versus 3.63% seen in November 2016, mainly due to softening of food prices. Some support also came with the report saying that India grew fastest among major economies worldwide at over 7.5 per cent in 2016 and will continue to drive global growth in 2017 with its share in the world GDP expected to rise to 17 per cent. On the global front, Asian markets ended mostly lower on Friday as investors weighed whether President-elect Donald Trump would stress growth-boosting steps when he takes office. Back home, finally, the BSE Sensex declined by 9.10 points or 0.03% to 27238.06, while the CNX Nifty was down by 6.85 points or 0.08% to 8,400.35.