Markets to make a soft-to-cautious start on somber global cues

The Indian markets rallied in last session posting gains of over half a percent on the hopes of a rate cut by RBI in its next policy meeting on Wednesday. Today, the start is likely to be a bit cautious on mostly somber global cues. Traders will be concerned with Commerce Minister Nirmala Sitharaman’s statement that the proposed changes in the regime for issuing H-1B visas for skilled workers by the US government will have an impact on Indian companies and the Commerce Ministry will soon hold a meeting with the industry to discuss its strategy for dealing with it. Meanwhile, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra has said that the Union Budget 2017-18 focuses on increasing tax compliance while at the same time safeguarding the honest tax payers from any harassment. Traders will be eyeing the rupee movement after it ended at a nearly three-month high against the US dollar on Monday.  There will be buzz in Tata group stocks, as the shareholders of Tata Sons during an Extraordinary General Meeting (EGM) passed with requisite majority a resolution to remove Cyrus Mistry as the Director of the company. There will be lots of important result announcements to keep the markets in action.

The US markets made a modestly lower closing in last session after showing a lackluster trade through the day, amid lingering uncertainty about the impact of President Donald Trump's policies with lack of major US economic data keeping some traders on the sidelines. The Asian markets have made mostly a lower start led by the Japanese index, as the yen strengthened against the dollar with political uncertainty infecting markets across the globe.

Back home, it turned out to be a stable day for the Indian equity indices, which sustained sanguinity for the fourth successive session and climbed well over half a percent on Monday on hopes of a rate cut by the Reserve Bank of India at its policy meet scheduled on Wednesday, and increased inflows by foreign funds. Slowing inflation and a fiscally responsible budget may sway the Reserve Bank of India (RBI) to cut interest rates this week. Further, after four months of selling frenzy, overseas investors turned net buyers in February and pumped in over Rs 2,300 crore in the capital market over the last three sessions, enthused by clarity on FPI taxation. The latest inflow followed a net pullout of Rs 80,310 crore from equity and debt together in the past four months (October-January). Prior to that, FPIs had invested over Rs 20,000 crore in the capital market. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Investors’ morale remained upbeat with Economic Affairs Secretary Shaktikanta Das’ statement expressing confidence that the economy will grow upwards of 7 per cent next fiscal. He reiterated that there will be transient impact of demonetisation on the economy, but it will not spill over to the next fiscal. The Economic Affairs Secretary taking a dig at global rating agencies for failing to upgrade India's sovereign rating despite significant improvement in macroeconomic parameters, has said the agencies are several steps behind from reality and are missing out on something which only they can best explain. Meanwhile, Realty stocks extended their gains for the fourth consecutive sessions after finance minister Arun Jaitley accorded infrastructure status to affordable housing in Budget 2017 to encourage investment in the segment and offered tax sops for developers sitting on completed unsold inventories. Further, Auto stocks gained traction on Union Minister Nitin Gadkari’s statement that government is keen on implementing vehicle policy that aims at scrapping 15-year old commercial vehicles in the first phase and it will send the proposal to GST Council after Cabinet nod. Finally, the BSE Sensex gained 198.76 points or 0.70% to 28439.28, while the CNX Nifty was up by 60.10 points or 0.69% to 8,801.05.