Markets to make a cautious start on sluggish global cues

The Indian markets despite recovery in the late hour ended mildly in red in the last session making it six days losing streak, today the start of the penultimate session of F&O series expiry is likely to be cautious on sluggish global cues, traders will also be concerned with collections under goods and services tax dipping to Rs 90,669 crore for August from a revised figure of Rs 94,063 crore for July. Of the tax collected, Rs 14,402 crore have come in as Central GST, Rs 21,067 crore as State GST and Rs 47,377 crore as Integrated GST, which is levied on inter-state movement of goods and imports and Rs 7,823 crore as compensation cess. Also, there will be cautiousness with the Asian Development Bank (ADB) expecting the RBI to go for another round of rate cut in the latter part of 2017-18 in view of sluggish economic activities but does not see possibility of any major fiscal stimulus. However, as the day progress some recovery will be seen in the market with rollover of positions to the next series. There will be some action in the telecom sector as the government has set up a high-level 5G committee with a mandate to lay down a road map for rollout of the technology by 2020. The government is working on creating a corpus of Rs 500 crore to fund 5G activity, mainly on research and product development. There will be some buzz in the primary market too, as the shares of ICICI Lombard General Insurance Company will list on bourses today. The Rs 5700 crore issue, was oversubscribed 2.98 times.

The US markets continued their lackluster trade in the last session and the major averages made a mixed closing, amid the release of some disappointing economic data, including a report showing an unexpected drop in new home sales. The Asian markets have made a mixed start as the dollar retained modest gains after Federal Reserve Chair Janet Yellen boosted expectations for an interest-rate rise in December.

Back home, Indian equity benchmarks ended the session flat with negative bias on Tuesday, as traders remained on sidelines ahead of the September F&O expiry later this week. Markets made a cautious start and extended their southward movement, as traders opted to offload risky bets amid rising tensions in the Korean peninsula after North Korean Foreign Minister Ri Yong Ho claimed recent comments by President Donald Trump represent a declaration of war. Sentiments also remained dampened after the Asian Development Bank (ADB) trimmed its growth forecast for South Asia to 6.7 percent this year and 7.0 percent next year, compared with estimates of 7.0 percent and 7.2 percent made in July. India’s growth was seen at 7.0 percent and 7.4 percent for this year and next, weaker than the July forecasts of 7.4 percent and 7.6 percent. ADB added that long-term interest rates in many Asian economies are closely linked to those in the US, policymakers need to strengthen their financial positions further and monitor debt levels and asset prices. Domestic bourses even went to test their 31,500 (Sensex) and 9,800 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trim most of their losses to end flat, as investors continued hunt for fundamentally strong stocks. Traders took some solace with Prime Minister Narendra Modi constituting an Economic Advisory Council in a bid to bring in economic reforms. NITI Aayog member and a former professor at the Centre for Policy Research, Bibek Debroy has been appointed as Chairman of Economic Advisory Council. It will address issues of macroeconomic importance' and present its views to the prime minister. Some support also came with Finance Minister Arun Jaitley’s statement that the government was in the process of undertaking measures to change the environment and provide a boost to the Indian economy. Finally, the BSE Sensex slipped 26.87 points or 0.08% to 31,599.76, while the CNX Nifty was down by 1.10 points or 0.01% to 9871.50.