Markets to make a flat-to-cautious start tailing global markets

The Indian markets bounced back in last session, snapping the three session decline and the major benchmarks posted gains of around half a percent on positive global cues. Today, the start is likely to be flat-to-cautious tailing the global cues and traders will be a bit concerned with report, the current account deficit (CAD) widened to $ 7.9 billion or 1.4 percent of GDP in the October-December quarter on account of higher trade deficit. It is, however, equal to 1.4 percent of GDP recorded in the same quarter of last fiscal. Also, the Reserve Bank reported that the country added $ 14.2 billion in foreign exchange reserves on the balance of payment basis during the first nine months of the outgoing financial year, which is marginally down from $ 14.6 billion accretion in the year-ago period. However, traders will be getting some support with Finance Minister Arun Jaitley’s statement that the government is keen to roll out the GST on July 1 and other aspects like bringing petroleum and land under its ambit will be considered after the first year of implementation of the new system of indirect tax collection. The GST Bill will be tabled in the Lok Sabha later in the day. There will be some buzz in the oil & gas sector stocks, as the Ministry of Petroleum and Natural Gas has reported that crude oil production fell 3.4 per cent in February 2017 as compared to the corresponding period last year.

The US markets made a flat closing with a negative bias in the last session and extended the lackluster performance seen in the previous session, amid continued uncertainty about the fate of the House Republican plan to repeal and replace Obamacare. The Asian markets have made mostly a green start, though the cautiousness is still persisting on speculation President Donald Trump may struggle with other policies.

Back home, a session after witnessing a distressing performance, Indian equity indices have managed to pull through an amazing performance by gaining over half a percent on Thursday, thanks to firm global cues. Sentiments got a boost 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 is hopeful of implementing from July 1 the Goods and Service Tax (GST) to help check tax evasion. The Government is likely to table four GST supplementary legislations in Parliament today. The four Bills are the Central Goods and Services Tax Bill 2017, the Integrated Goods and Services Tax Bill 2017, the Union Territory Goods and Services Tax Bill 2017 and the Goods and Services Tax (Compensation to the States) Bill 2017. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 356.64 crore on March 22, 2017. Further, terror attack in UK, which is said to have taken five lives and left at least 40 injured has limited impact on Indian financial markets. On the domestic front, Investors turned cautious after Reserve Bank of India raised concerns over farm loan waiver as it undermines credit discipline. This observation comes in the context of the likelihood of the newly elected BJP-government in Uttar Pradesh making good its election promise of waiving farm loans and the Opposition in Maharashtra piling pressures on the BJP-Sena government to waive farm loans. According to a recent SBI report, the total outstanding credit (2016) for agriculture sector was Rs 86,241.20 crore in Uttar Pradesh with average ticket size of Rs. 1.34 lakh. Meanwhile, Realty stocks gained traction as the government 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. Finally, the BSE Sensex surged 164.48 points or 0.56% to 29332.16, while the CNX Nifty was up by 55.85 points or 0.62% to 9,086.30.