Markets to get a soft start on sluggish global cues

The Indian markets recovering from the lows managed a flat close albeit in red in the last session, following hawkish signals from the US Federal Reserve. Today, the start is likely to be in red on sluggish global cues and geopolitical worries, all eyes will be on Opec and non-Opec nations meeting today to discuss a possible extension of oil supply cuts to support prices. However, in latter day of trade markets may get some support with report that the government is considering a plan to loosen the fiscal deficit target so that it could spend an additional Rs 500 billion ($ 7.7 billion) in the financial year ending in March 2018. A separate report has said that given the lack of considerable space both on the monetary and fiscal front to support economic growth, part of the country’s forex reserves can be used to support GDP numbers. Meanwhile, World Bank President Jim Yong Kim has said that India has been growing 'pretty robustly' and called for more cooperation among the multilateral system, private sector and the governments to take advantage of the current win-win situation. The infra sector stocks will be in action as the Government’s 100 smart cities mission seeks to invest over $15 billion in the next few years to build efficient and effective city management solutions and infrastructure.

The US markets turned mildly weak in the last session with the Dow and the S&P 500 pulling back off yesterday’s record closing highs, as traders continued to digest the Federal Reserve's monetary policy announcement, when it left interest rates unchanged but signaled another rate hike is likely this year. The Asian markets have made mostly a lower start on renewed geo-political worries after a report that North Korea could respond to fresh sanctions with a hydrogen bomb in the Pacific and on a downgrade to China's credit rating by S&P Global Ratings.

Back home, Erasing their initial losses, Indian equity benchmarks ended the session flat with negative bias and extended their consolidation for third straight day on Thursday. After making a decent start, markets witnessed sharp sell-off which dragged key gauges below their crucial 32,200 (Sensex) and 10,100 (Nifty) levels in early deals, as traders turn concerned with report that advance tax payments by top corporate for September quarter has increased only marginally. Adding to the pessimism, a survey found that optimism level among India’s Chief Financial Officers during July-September touched a one and half year low amid concerns related to subdued demand and strain on corporate balance sheet. The Composite CFO Optimism Index for the September quarter of this year declined by 11% year-on-year and by 5.7% on a quarter-on-quarter basis. However, markets got support near those psychological levels and started trimming their losses with traders taking solace after Finance Minister Arun Jaitley hint at a package of measures to boost the economy, while virtually ruling out any cut in duties on petroleum products to check the spike in fuel prices. Jaitley said the government is considering additional measures to bolster economy that has hit a three-year low of 5.7 percent in the first quarter of the current fiscal. He said an announcement with regard to the additional steps will be made after consulting Prime Minister Narendra Modi. Traders also get some comfort with World Bank President Jim Yong Kim’s statement that India has been growing pretty ‘robustly’ and predicted a strong global growth this year. Finally, the BSE Sensex slipped 30.47 points or 0.09% to 32,370.04, while the CNX Nifty was down by 19.25 points or 0.19% to 10,121.90.