Markets to get a weak start amid feeble global cues

The Indian markets fell further in last session, though the decline was modest with some sign of recovery in the final hours. Today, the start is likely to be in red on feeble global cues. There will be some cautiousness with government continuing the clampdown on cash transactions, proposing to further tighten payment norms by capping cash transactions at Rs 2 lakh. Finance Minister in all has moved 40 amendments to the Finance Bill 2017. Meanwhile, the government has said it is not possible to pinpoint the impact of demonetisation on GDP as economic growth is contingent on a number of factors. However, as per the second advance estimates released by the Central Statistics Office on February 28, based mostly on information for the first nine to ten months of 2016-17, the growth rate of gross domestic product (GDP) at constant market prices is estimated to be 7.1 per cent in 2016-17. The traders will also be eyeing the rupee movement in today’s trade, which gained further ground against dollar and reached its 17 months high and may weigh down the IT and technology stocks. There will be some buzz in the infra stocks on reports that NITI Aayog will prepare a list of 10 big infrastructure projects that can be developed under the public private partnership (PPP) mode. The list would be prepared after taking into consideration the details of such big projects that would be provided by the states in the coming weeks.

The US markets suffered sharp slump in the last session on uncertainty about the fate of the Republican plan to repeal and replace Obamacare ahead of an anticipated vote on Thursday. The Asian markets following the US counterparts have made a weak start and some of the indices in the region are down by over a percent in early deals, concern continued amid uncertainty over prospects for the U.S. president’s policies.

Back home, extending previous session’s southward journey, Indian equity benchmarks ended the session slightly in red on Tuesday. Soon after a positive start, markets entered into red terrain, as traders reacted negatively to SBI Research report which highlighted that if the UP government fulfils its farmer loan waiver promise, banks are likely to take a hit of Rs 27,420 crore and the scheme will lead to some stress on the state’s fiscal arithmetic. The BJP had in its UP election manifesto promised to waive farmers’ loans if elected to power. The report said that schedule commercial banks together had an outstanding farm credit of Rs 86,241.20 crore in UP with the average ticket size of Rs 1.34 lakh, as of 2016, most of which is to small and marginal farmers.  However, some recovery took place in last leg of trade and pared most of their initial losses, as investors opted to buy beaten-down but fundamentally strong stocks. Traders took some support with report that Cabinet cleared four supporting GST legislations, paving the way for their introduction in Parliament. Once approved by Parliament, the states would start taking their SGST bill for discussion and passage in the respective state assemblies. Positive opening in European markets too provided some support, as investors eyed rising oil prices and intensifying talks between Greece and its euro zone creditors. Asian shares hit 15-month highs on Tuesday, while the dollar and US bond yields were on the back foot on the prospect of a less-hawkish Federal Reserve policy trajectory. Back home, finally the  BSE Sensex decreased 33.29 points or 0.11% to 29,485.45, while the CNX Nifty was down by 5.35 points or 0.06% to 9,121.50.