Markets likely to make a mildly positive-to-flat start

The Indian markets coming out of the choppiness managed a flat closing in the last session with Sensex ending in green. Today, the start is likely to be mildly positive, although the trade may remain range-bound lacking any major supportive cues. There will be some cautiousness with Chief Economic Adviser Arvind Subramanian’s statement that India’s high economic growth rate last fiscal may not reflect the actual impact of demonetisation particularly on the informal sector, and it may take a few months to assess its real fallout. The infra stocks will keep buzzing, as the government has approved the policy guidelines to allow financially sound state government entities to borrow directly from bilateral ODA (Official development Assistance) partners for implementation of vital infrastructure projects. There will be some reaction among the sugar stocks too, with the government’s decision to extend stock limits on sugar traders by another six months till October 2017 to check sweetener prices that are ruling at Rs 42-44 per kg. The move will enable state governments to impose stock limits and licensing requirements in respect of sugar. There will be some important result reactions too, to keep the markets in action.

The US markets made a mixed closing in last session, as traders reacted to the latest earnings news as well as a steep drop by the price of crude oil. The overall trading activity was somewhat subdued with lingering geopolitical uncertainty keeping some traders on the sidelines. The Asian markets have made mostly a positive start, the Japanese market was up as the country’s exports grew at the fastest rate in more than two years in March, supporting a moderate economic recovery, on the other hand the Chinese market was flat after four days of losses.

Back home, Indian stock markets ended the range bound day of trade on a flat note as investors gauged the impact from British Prime Minister Theresa May's surprise decision to hold early elections. There was no major buying in any corner that could lift the markets and traders remained on sidelines ahead of the first-round presidential polls in France this weekend and amid brewing geopolitical tensions. Market participants also remained cautious with the report that IMF trimmed India's annual growth forecast by 0.4 percentage points to 7.2% for 2017, citing the temporary negative consumption shock induced by cash shortages and payment disruptions from the recent demonetization move. Adding the woes, India's largest software services exporter, Tata Consultancy Services (TCS) missed estimates on both the profit and revenue front with negative growth in the BFSI and retail segments. The company's net profit for the Q4 fell 2.5% sequentially to Rs 6,608 crore, while revenues declined 0.3% to Rs 29,642 crore. It's for the second consecutive quarter that it has underperformed Infosys. Further, several banking stocks came under pressure after IndusInd Bank missed estimates on profit front and ahead of Yes Bank earnings later today. IndusInd Bank reported a rise of 21.16% in its net profit at Rs 751.61 crore for the quarter ended March 31, 2017 as compared to Rs 620.35 crore for the same quarter in the previous year. Net Profit was adversely impacted by sharp jump in provisions despite stable asset quality. Provisions and contingencies jumped 101.32% to Rs 430.13 crore in the quarter from Rs 213.66 crore in the same quarter last year. However, sentiments got some support with the report that India jumped one spot to 8th rank in the 2017 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index. Finally, the BSE Sensex gained 17.47 points or 0.06% to 29336.57, while the CNX Nifty was down by 1.65 points or 0.02% to 9,103.50.