Markets to once again get a cautious start; GDP data eyed

The Indian markets snapped their gaining streak in last session and ended with a quarter percent of losses. Today, the start is likely to remain cautious and the traders will be deriving some cues from the US President’s speech. On the domestic front, all eyes will be on the revised advance estimate for GDP growth in 2016-17. The Central Statistics Office (CSO) is slated to come up with its second official estimate of gross domestic product (GDP) growth later in the day for the financial year 2016/17 after factoring in demonetisation impact in the December quarter. The first advance estimates of National Income, 2016/17 pegged the GDP at growth at 7.1 per cent sans demonetization impact. The CSO is also slated to release the numbers for the third quarter which witnessed cash crunch following demonetization move. Meanwhile, traders will be getting some support in early deals with Finance Minister Arun Jaitley’s statement that India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas. He also expressed his hopes that the GST would be implemented by July 1. Banking stocks will be in focus, as an umbrella body of nine bank unions has called a day-long strike to protest the government's “anti-people banking reforms”.

The US markets coming off their initial weakness posted modest gains in last session, with the Dow and the S&P 500 once again climbing to new record closing highs, amid optimism about pro-business policies under President Donald Trump. The Asian markets have made a mixed start again with some indices trading marginally in red, though the Japanese market was trading higher on receiving support from a drop in the yen overnight, with the dollar maintaining gains ahead of Donald Trump’s address to Congress.

Back home, Indian benchmark indices snapped its 6-day winning streak on Monday as market participants remained cautious ahead of the US president Donald Trump's speech to a joint session of Congress on Tuesday night. On the domestic front, sentiments were undermined by the report that economic think tank National Council of Applied Economic Research (NCAER) has lowered the country's growth forecast to 6.9% for the current fiscal on account of demonetization. According to NCAER, the growth rate would rebound to 7.3% for 2017-18. Recently, IMF lowered GDP growth forecast to 6.6% due to the strains that have emerged in the economy as a result of ‘temporary disruptions’ caused by demonetisation. Furthermore, Investors turned jittery with a private survey stating that the full impact of the government's decision to demonetise high denomination currency in November is likely to show up in the December quarter's GDP growth number that comes out Tuesday. It expects the GDP growth for the quarter ended December 31, to be in the range of 5.5 to 6.5 percent. However, the downside remained capped by gains in index heavyweight Reliance Industries, which surged to eigth-year high on continued hopes about its telecom unit Reliance Jio. In past four trading sessions, the stock jumped 17% from Rs 1,074 on February 20, after Reliance Jio Infocomm (RJio), a subsidiary of RIL, announced that its tariff plans will become applicable from April 1, 2017. Some support also came with the report that Foreign Direct Investment (FDI) in India grew 18% during 2016 to touch $46 billion. The main sectors, which attracted the highest foreign inflows, include services, telecom, trading, computer hardware & software and automobile. Finally, the BSE Sensex declined 80.09 points or 0.28% to 28812.88, while the CNX Nifty was down by 42.80 points or 0.48% to 8,896.70.