Markets to see some recovery with a positive start on supportive global cues

The Indian markets suffered sharp sell-off in the last session, with major benchmarks deposing over a percent in tandem with the selling in global markets, on uncertainty over US President’s reform proposals. Today, the start is likely to be in green and some recovery can be seen amid positive regional cues. Traders will also be taking some support with Finance Minister Arun Jaitley’s statement that India's GDP can grow by 7-8 percent if the global economy picks up. He also said the government was hopeful of implementing from July 1 the Goods and Service Tax (GST) to help check tax evasion. However, there will be some cautiousness too with reports that five people were killed and 40 others injured when a terrorist suspect mowed down pedestrians on a bridge and stabbed a police officer outside UK parliament complex. On sectoral front, there will be buzz from the realty sector stocks, as the government has announced a credit-linked interest subsidy (CLSS) scheme for home loans, leading to savings of more than Rs. 2 lakh, or up to Rs. 2,000 on EMIs. There will be some scrip specific actions too based on NSE announcement of adding 15 new stocks to the futures and options (F&O) segment from March 31.

The US markets continued their lackluster trade in the last session and made a mixed closing after a choppy trade. Marketmen remained cautious due to uncertainty about the fate of the Republican plan to repeal and replace Obamacare. The Asian markets have made a modestly higher start. The Japanese market too has recovered following its biggest drop since Donald Trump’s election, as demand for haven assets ebbed and the yen halted a seven-day rally.

Back home, Wednesday's session saw Indian benchmark indices complete a hat-trick of disappointing performances and reaching the finishing line only after collapsing by over a percent. Investors remained worried about the faster growth prospect in the United States in absence of a big fiscal stimulus from President Donald Trump, political uncertainties in Europe and a possible reversal of the easy money policy by the European Central Bank. Metals, oil and auto stocks were prominent losers as the commodity rally halted on fears the US growth prospects now looks dim if Trump fails to come up with an expansionary fiscal policy. On the domestic front, sentiments got undermined by the private report that India's GDP growth is expected to slow to 6.7% in the January-March quarter of this fiscal year as overall activity is yet to bounce back to levels seen prior to demonetisation. According to the report, a pick-up in headline CPI inflation, better global conditions (exports) and narrowing interest rate differentials (with the US) have lowered the probability of a rate cut and increased the probability of a hike. Market participants remained cautious over the reports that the government wants to tighten even further the proposed Budget measure aimed at discouraging black money through restrictions on cash transactions to Rs 2 lakh from Rs 3 lakh. The government also plans to make inclusion of the Aadhaar ID mandatory in applications for permanent account number (PAN) cards. However, Investors failed to get any sense of relief with Finance Minister Arun Jaitley's statement that the government is hoping to implement the Goods and Services Tax (GST) by July 1, after the enabling Bills get Parliament nod in the current budget session. The Union Cabinet earlier this week approved four GST related bills -- The Central Goods and Services Tax Bill 2017 (The CGST Bill), The Integrated Goods and Services Tax Bill 2017 (The IGST Bill), The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill) and the Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill). Finally, the BSE Sensex decreased 317.77 points or 1.08% to 29167.68, while the CNX Nifty was down by 91.05 points or 1% to 9,030.45.