Markets to make a cautious start on sluggish global cues

The Indian markets in a late hour bounce back managed a modestly positive close in last session. Today, the start is likely to be a bit somber and the traders will be reacting to the report that tax collection under the Goods and Services Tax (GST) was lower at Rs 83,346 crore in October, against a mop-up of over Rs 90,000 crore in September. The Finance Ministry said that total collection stood at Rs 83,346 crore till November 27 for the month of October and 50.1 lakh returns were filed for the month. Markets however may get some respite with report that the government sticking to its promise to lower the tax burden on India Inc is exploring the possibility of reducing the corporate tax rates for larger firms as well. The exact quantum of the cut in corporate tax rate is expected to be finalised closer to the presentation of the Union Budget 2018-19, but revenue implications also have to be factored in. Also, Asian Development Bank expects the Indian economy to pick up in the coming quarters and grow by 7 per cent this fiscal. There will be buzz in the telecom sector, as the Telecom Regulatory Authority of India (Trai) will issue recommendations on net neutrality.

The US markets made a mixed closing after a lackluster trade, as traders seemed reluctant to make significant moves ahead of congressional testimony from Federal Reserve Chair nominee Jerome Powell and current Fed Chair Janet Yellen. The Asian markets have made a mixed start amid uncertainty over the US tax bill, though the Japanese market was trading higher as the yen reversed earlier gains. 

Back home, recovery which emerged in last leg of trade mainly helped Indian equity benchmarks to end slightly in green terrain on Monday. Markets made a negative start to the crucial week of F&O expiry and traded mostly in red throughout the session, as traders remained on sidelines ahead of GDP and PMI data for the manufacturing sector due later this week. Sentiments also remained dampened with Standard & Poor’s decision of retaining its sovereign rating for India at BBB- with a stable outlook, dashing hopes of another upgrade after rival Moody’s lifted its rating by a notch after a gap of nearly 14 years. Traders also remained concerned with industry body Assocham’s statement that inflation would remain a key concern for the RBI and the government, dimming hopes of a cut in interest rates. The chamber observed that as uncertainty and apprehension loom over crude oil prices and vegetables, mainly on the back of rising retail prices of onion and tomatoes, it is disrupting household budgets. However, markets took U-turn from intraday lows in final hour of trade and staged splendid recovery to enter into green, as traders took some solace with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the time has come for consolidation of reforms, including GST, bankruptcy code and benami law, initiated by the Modi government in the last 42 months to ensure that the steps deliver the 'desired fruits'. Markets participants also get some comfort after Economic Affairs Secretary Subhash Chandra Garg expressed optimism with government’s various reforms like fiscal consolidation drive and note ban and said that India’s second quarter (Q2) growth will be far better than the first quarter (Q1) of the current financial year. Besides, a foreign brokerage firm has time and again reiterated its bullishness on the Indian economy, saying that the country is slated to see tremendous growth in the near future. It expects the second quarter India’s Q2 GDP number growth to be around 6.5%, which will confirm a turn in the growth environment. Finally, the BSE Sensex gained 45.20 points or 0.13% to 33,724.44, while the CNX Nifty was up by 9.85 points or 0.09% to 10,399.55.