Markets to get a strong start on positive global cues

The Indian markets consolidated in the last session, coming a bit off the highs seen in previous one. Today, the start is likely to be strong tailing the positive global cues, while the traders will also be getting support with reports of India's exports exhibiting a double digit growth of 17.48 percent, valued at $ 24.5 billion in February compared to $ 20.84 billion during the same month last year on increase in shipments of non-petroleum, non gems and jewellery products. Meanwhile, the government on Wednesday launched a new scheme - TIES - for developing export linked infrastructure in states with a view to promote outbound shipments. In other positive development the GST Council is likely to endorse supplementary legislations needed for implementation of the goods and service tax (GST) regime. It may also take up capping the cess to be levied on demerit goods like luxury cars and tobacco products for creation of a corpus that will be used for compensating states for any loss of revenue from GST implementation in the first five years. There will be some buzz in the banking stocks, as the Finance Minister Arun Jaitley has said, the government would consider setting up multiple oversight committees under the Reserve Bank of India (RBI) to examine the cases of non-performing assets (NPAs) referred by banks.

The US markets bounced back in last session; with all the major bourses posting gains of over half a percent after the Fed announced its decision to raise the target range for the federal funds rate by 25 basis points to 0.75 to 1 percent. The Asian markets have made mostly a positive start, tailing the overnight cues from the US markets after the dollar tumbled as the Federal Reserve raised interest rates without accelerating its timeline for future tightening.

Back home, Indian equity benchmarks ended the lackluster day of trade with marginal losses, as traders opted to book some of their profits after yesterday's rally. Frontline gauges swung between green and red throughout the day, as traders remained cautious ahead of the US Federal Reserve's rate decision. The Fed is almost universally expected to raise its benchmark interest rates, but investors are keen on seeing how much more tightening will happen this year. Traders remained on sidelines as the likelihood of a repo rate cut in April 2017 remained subdued. Those hoping that the Reserve Bank of India (RBI) would slash interest rates going ahead may just have to wait further as the inflation may have come back to haunt the economy. Higher food, fuel, non-fuel commodities and power prices, and playing out of base effect in February had led to both Wholesale Price Index (WPI) and Consumer Price Index (CPI) or retail inflation soaring northwards to 6.55% and 3.65%, respectively. The WPI inflation was highest in 39 months, while the retail inflation was at a 4-month high. However, losses remained capped as Moody’s Investors Service said that BJP’s thumping victory in Uttar Pradesh and substantial gains made in other states will facilitate reforms as the ruling party inches closer to a majority in Upper House. It added that the 2017 state election results in India demonstrate broad-based popular support for the Indian government’s policy agenda and will facilitate the implementation of further reforms, a credit positive for the sovereign. Sharp rally in rupee hurt the shares of software companies. The rupee climbed at 65.40 per dollar on Wednesday, its strongest since November 2015, compared with its previous close of 65.80. Finally, the BSE Sensex declined 44.52 points or 0.15% to 29398.11, while the CNX Nifty was down by 2.20 points or 0.02% to 9084.80.