Markets to come out of consolidation mood with a positive start

The Indian markets lost their way in the final hours and ended flat in last session, despite firm cues from global markets, as traders’ awaited corporate earnings to give further cues. Today, the start is likely to be in green on positive global cues. Traders will also be getting some support with NITI Aayog’s expectation that the first strategic disinvestment of Central Public Sector Enterprises will be conducted within the current financial year. It said that the process of divestment is being carried out by DIPAM (Department of Investment and Public Asset Management) and the first transactions are expected in the current financial year after a long gap of 14 years. Meanwhile, the Union Cabinet has approved the revised model concession agreement for public private partnership projects in major ports. The amendments were made in the MCA to attract more investments in the port sector and are expected to clear the hurdles created by some of the provisions in the current model concession agreement. There will be some somberness in the IT stocks on reports that the US is considering new regulations to prevent the extension of H-1B visas as part of president Donald Trump's 'Buy American, Hire American' initiative, a move which could hit tech firms and hundreds of thousands of Indian IT professionals. The infra stocks too will be in focus after the government approved Rs 12,178 crore worth of infrastructure projects and an AIIMS in Bilaspur in Himachal Pradesh to be constructed at a cost of Rs 1,351crore.

The US markets surged to fresh closing highs in the last session, as upbeat data added to recent optimism about the economic outlook. Also, stocks remained positive following the release of the minutes of the Federal Reserve's latest monetary policy meeting. The Asian markets have made a strong start with Japanese market surging to a 10-year high, as solid economic data from the United States and Germany reinforced investors' optimism while oil prices hovered at around two and half year high.

Back home, paring all of their early gains, Indian equity benchmarks once again ended flat on Wednesday, as traders remained on sidelines ahead of ahead of corporate results for the third quarter FY18 to be released later this month and service PMI data to be released tomorrow. However, markets made optimistic start with key gauges hitting their crucial 10,500 (Nifty) and 34,000 (Sensex) levels in morning deals with traders reacting positively to the last day’s report of manufacturing PMI rising to 54.7 in December 2017 from 52.6 in November on the back of robust improvement in the health of the sector since December 2012. Some support also came with the Rajya Sabha unanimously passing the Insolvency and Bankruptcy Code (Amendment) Bill that replaces an Ordinance that prevents unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code. Traders also took some encouragement with foreign brokerage report stating that India’s growth rate is expected to accelerate over the coming year and is likely to improve further to 7.6% by 2019-20 as key sectors would revive from disruptions related to the implementation of GST and demonetization. The report further said the recovery in India’s GDP growth will likely be relatively gradual, preventing price pressures from rebounding and allowing the Reserve Bank of India to keep rates on hold for the time being. However, really got fizzled out and markets ended lower with traders booking all of their early gains ahead of key corporate results starting next week. Investors are awaiting corporate results, including from Tata Consultancy Services and Infosys that are scheduled next week, amid signs the economy is recovering after the withdrawal of high-denomination currency bills in late 2016 and the introduction of a national goods and services tax last year. Meanwhile, the government has notified lower 1% GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it. The finance ministry has notified the changes decided by the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, in November 2017. Finally, the BSE Sensex slipped 18.88 points or 0.06% to 33,793.38, while the CNX Nifty was up by 1.00 points or 0.01% to 10,443.20.