Markets to make a flat-to-marginally positive start

The Indian markets remained in consolidation mood and ended lower for the second straight day in last session. Today, the start is likely to be flat on cautious cues from the global markets. Traders will be concerned with an IMF report that India's financial sector is facing considerable challenges with high non-performing assets and slow deleveraging and repair of corporate balance sheets testing the resilience of the banking system and holding back growth. However, the Reserve Bank of India in its latest edition of the Financial Stability Report has noted that while the stress in the banking sector remains elevated, it appears to be bottoming out. Also, there will be some support with Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $ 6.5-7 trillion economy by 2030, and at the current exchange rate it would touch $ 10 trillion by 2035-40. He said that India will be remarkably different country as the size of its economy will enhance the country's role in global affairs. The 2G spectrum case related stocks will continue buzzing after the special CBI court acquitted all 18 accused including A Raja and K Kanimozhi in 2G spectrum allocation case.

The US markets though managed a modestly positive close but ended the last session off their highs. Optimism about the economic impact of the Republican tax reform bill contributed to the strength but the buying interest was somewhat subdued. The Asian markets have made mostly a positive start, though the Japanese stock market is flat in choppy trade on Friday despite the positive lead from Wall Street.

Back home, extending their consolidation mood for second straight session, Indian equity benchmarks ended the choppy day of trade slightly in red amid weak global cues. Markets altered between green and red throughout the session and profit booking in dying hour of trade dragged markets tad below the neutral lines. Traders also remained concerned with the details of the minutes of the MPC meeting held on December 5 and 6 released by the Reserve Bank of India (RBI), where RBI Governor Urjit Patel flagged concerns over rising global oil prices and uncertainties on fiscal and external fronts. Two other members in the panel, Deputy Governor Viral Acharya and Executive Director Michael Debabrata Patra, flagged the issue of inflation in petroleum products. Sentiments also remained down-beat with private report stating the RBI’s policy rates are likely to remain unchanged in 2018 despite higher inflation, a recovering growth, and elevated oil prices.  Meanwhile,  the special CBI court pronounce the judgment in the 2G scam, which rocked the telecom sector some years ago and played a major part in cementing the UPA government’s reputation of being corrupt. The court acquitted all accuses including former telecom minister A Raja acquitted in 2G case. However, losses remained capped with traders getting some solace with the Union Cabinet approving the Consumer Protection Bill, 2017, paving the way for its introduction in Parliament. Once approved by Parliament, the new law will replace the current Consumer Protection Act, 1986. Some support also came with Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $6.5-7 trillion economy by 2030, and at the current exchange rate it would touch $10 trillion by 2035-40. Finally, the BSE Sensex slipped 21.10 points or 0.06% to 33,756.28, while the CNX Nifty was down by 3.90 points or 0.04% to 10,440.30.