Markets to make positive start tracking firm Asian counterparts

Indian equity indices edged lower for sixth straight session on Wednesday, as authorities widened a probe into Punjab National Bank’s $2 billion fraud. Today, the start of the session is likely to be on positive side, as traders might go for value buying after six days of continuous drubbing amid firm trade in regional counterparts. Traders will take some support with Niti Aayog vice chairman Rajiv Kumar’s statement that the country’s economy, which had witnessed slow growth due to decline in private investment and other factors, is on the rise again. He added that the employment should get due attention and that job creation would contribute to GDP growth as well. Some support will also come from report that the Indian government reiterated its pitch for a sovereign rating upgrade to Fitch, citing strong macro-economic fundamentals. Fitch has a BBB-, the lowest investment grade sovereign rating on India, with a stable outlook. However, the Congress' victory over the ruling BJP in Rajasthan local body polls and the Telugu Desam Party’s decision to pull out two of its ministers in the central government may serve to keep underlying sentiment somewhat cautious. Stocks related to telecom space will be buzzing on report that The Union Cabinet has relaxed spectrum holding caps, giving a boost to M&As and spectrum sale, as carriers try to sell assets, including airwaves, to repay debt. The Cabinet also extended the payments tenure for auctioned airwaves from 12 years. Shares of consumer goods firms could be in focus after the Union Cabinet hiked dearness allowance to Central Government employees.

The US markets ended mostly in red on Wednesday after White House Press Secretary Sarah Sanders suggested Mexico and Canada could be exempt from President Donald Trump's planned tariffs on steel and aluminum imports. All the Asian markets were trading in green in early deals on Thursday, after market participants digested reports of top White House economic adviser Gary Cohn’s resignation.

Back home, bears took full control on Dalal Street with frontline gauges ending Wednesday’s trade with a cut of around a percent, breaching their crucial 10,200 (Nifty) and 33,100 (Sensex) levels, as growing fears over the PNB scam and continued selling pressure from FIIs on expectations of faster than anticipated interest rate hike in the US kept the underlying sentiments cautious. After a cautious start, markets extended their downfall to end near intraday lows as sentiments turned pessimistic with a private report that private equity and venture capital investments in February registered a sharp 60% month-on-month decline to $1.4 billion across 63 deals, due to the absence of any mega deals. As per the report, no major deals above the value of $300 million happened last month, causing the decline from January, which registered deals worth $3.5 billion. Separately, following the new norms on stressed assets issued by the RBI last month, power companies fear that two-thirds of private thermal power capacity is at high risk of being declared as non-performing assets (NPA). Severe impact is expected on 51,000-Mw existing power generation capacity set up with investments of more than Rs 4 lakh crore, and another 28,000-Mw plants are under construction. Traders failed to get any sense of relief with report that the government is planning to pitch for an upgrade in its sovereign ratings from global rating agency Fitch, highlighting its structural reform initiatives and a revised fiscal consolidation framework. Officials from the Finance Ministry are scheduled to meet representatives from Fitch Ratings on March 7 as part of the annual review by the agency. Traders failed to get any solace with private report that the Indian economy is likely to recover gradually to 7.1% in the 2018-19 financial year, as GST-related disruptions have eased and consumption levels have improved. Finally, the BSE Sensex declined 284.11 points or 0.85% to 33,033.09, while the CNX Nifty was down by 95.05 points or 0.93% to 10,154.20.