Markets to make a soft-to-cautious start on mostly lower global cues

The Indian markets posted modest gains in the last session despite choppy trade, as investors remained optimistic of upbeat corporate earnings results. Today, the start is likely to be soft to cautious on mostly unsupportive global cues. However, markets may see recovery in latter trade and shore up with India emerging as the 'sweet spot' along with neighbour China to rev up the global economic growth at the World Economic Forum (WEF) Annual meet in Davos. Along with China, India was also applauded as a major driving force for world growth with leaders and economists emphasising the need for increased regional cooperation. IT and pharma stocks will be under pressure ahead of Donald Trump's swearing-in as US President today. There will be caution on talks of pricing pressure on pharma, and new H1B norms for IT companies. The aviation stocks will be in action, as more than three dozen airports across India, which today do not handle a single flight, may get connected under the government’s UDAN (Ude Desh Ka Aam Naagrik) scheme. Bids by interested airlines have been received to connect 43 such new airports for 190 routes. There will be lots of individual result reactions too, to keep the markets buzzing for the day.

The US markets ended modestly lower in the last session, partly due to uncertainty about President-elect Donald Trump's policies ahead of his inauguration on Friday. Though indices came off the day’s low on report that first-time claims for U.S. unemployment benefits unexpectedly declined in the week ended January 14. The Asian markets have once again made a mixed start, though the Shanghai Composite Index held gains after Chinese gross domestic product for the fourth quarter topped economist forecasts.

Back home, Indian benchmarks indices carried forward their northbound journey for yet another session on Thursday, ended slightly higher as investors’ awaited fresh triggers amid an uncertain global scenario. It turned out to be a rather volatile day of trade as the indices rebounded after drifting to lower levels in the morning session as sustained position build up was witnessed in several frontline stocks. Sentiments got some support with Minister for Road Transport and Shipping Nitin Gadkari’s statement that it is the appropriate time to invest in India and added that the country is also working on ways to improve purchasing power of common men as that will present further opportunities. Further, market participants got some comfort with the private report indicating that strong domestic demand and cost competitiveness in exports will help Indian companies to overcome uncertainties from global geopolitical changes and domestic policy-making. According to report, faster economic growth as well as reforms will make India a good macroeconomic story and this, coupled with the stable credit profile of companies, bodes well for foreign currency bonds by Indian issuers. However, gains remained capped over policy uncertainties about the incoming Donald Trump administration in the U.S. and depreciation in rupee value against the dollar. Extending the previous session losses, the rupee plunged by another 14 paise to 68.22 against the previous close of 68.08 at the Interbank Foreign Exchange market today. On the global front, Asian markets ended mixed on Thursday, as investors turned cautious after Federal Reserve Chair Janet Yellen hinted that interest rates in the United States could rise quickly this year. Back home, finally, the BSE Sensex surged 50.96 points or 0.19% to 27308.60, while the CNX Nifty rose 18.10 points or 0.22% to 8,435.10.