Markets likely to make flat-to-positive start

Indian shares fell for a third straight session on Thursday, although losses remained modest after impressive core sector data for January and rebounding GDP growth. Today, the start of the session is likely to be on positive side ahead of the second leg of the Budget Session of Parliament, slated to commence from March 5. The multi-crore PNB bank fraud and the Rotomac issue are set to rock the second leg of Budget Session. Traders will also be eyeing a monthly survey on the performance of India's services sector in February 2018, slated to be released later in the day. The Indian services sector remained in expansion mode in January, registering the fastest rise in activity in three months driven by a renewed increase in new business orders. Market participants are likely to get some support, as the BJP expanded its foothold in northeast with its stunning victory in Tripura polls and improved performance in Meghalaya and Nagaland elections, boosting its prospects for 2019 Lok Sabha polls. Some support will also come with Finance Minister Arun Jaitley showing confidence that India would retain its position of fastest growing economy in the coming decades, like China did in the last three decades. He said, the way the situation in the world is changing there is a great opportunity that has come in the way of India. The world keep facing its challenges and in the last few years India has started leaving its footprints behind. Meanwhile, India’s exposure to US government securities rose sharply to a high of $144.7 billion at the end of 2017. The country remained the 12th largest overseas holder of such securities, just behind oil rich Saudi Arabia, whose holding stood at $147.4 billion in December 2017.

After coming under pressure early in the session, US markets showed a significant turnaround over the course of the trading day on Friday and ended mostly in green terrain. Asian markets were trading mostly in red on Monday, on fears of a trade war after President Donald Trump vowed to impose new tariffs on steel and aluminum imports.

Back home, Indian equity benchmarks ended the volatile day of trade with a cut of over one third of a percent. Markets traded choppy for most part of the day, as sentiments remained dampened after former RBI governor D Subbarao cautioned against India’s deficit challenge and said the country is no longer the sweet spot due to rising oil prices. Some anxiety also came after India reported a fiscal deficit of Rs 6.77 trillion ($103.72 billion) for April-January or 113.7 per cent of the target originally set for the fiscal year that ends in March. After trading negative in morning deals, Indian equity benchmarks made splendid recovery to get back in green terrain, as traders took some solace with  report that the Indian economy grew at five-quarter high of 7.2% in the October-December period reflecting overall recovery due to good show by agriculture, manufacturing, construction and certain services. The economy is expected to grow at 6.6% in the current fiscal ending March 31, as per the second advanced estimates of the Central Statistics Office (CSO), compared to 7.1% in 2016-17. The earlier estimate was 6.5%. The growth for the second quarter (July-September) has been revised upwards to 6.5%, from 6.3% estimated earlier by the CSO. But, selloff in last hour of trade mainly played spoil sport for the domestic markets and dragged Sensex below their crucial 34,100 mark. Traders shrugged off report that India’s core sectors grew at a faster clip in January from a year ago than in the previous month, with an uptick in cement, electricity, coal, refinery products and steel industries, indicating a strong start to the last quarter of 2017-18. The combined index of the eight core industries rose 6.7% in January compared to 4.2% in December 2017. Traders failed to get any relief with Prime Minister’s Economic Advisory Council Chairman Bibek Debroy’s statement that the economy is on the right track and the current expansion in the growth rate suggests that the reforms initiated by the government have started showing results. Finally, the BSE Sensex shed 137.10 points or 0.40% to 34,046.94, while the CNX Nifty was down by 34.50 points or 0.33% to 10,458.35.