Markets to make soft opening on muted global cues

Indian markets edged lower on Thursday amid lingering concerns over the impact of a trade war on the global economy and on mostly weak cues from the U.S. and Asian markets. Today, markets are likely to make soft start as global markets turned defensive on concerns over the U.S. investigation into the Trump Organization and renewed worries that U.S. tariffs could hurt the global economy. Back on domestic front, sentiments will be dampened on report that India’s trade deficit for February 2018 was estimated at $11,979.21 million, 25.8 per cent higher than the $9,521.73-million deficit reported during February 2017. Exports from the country rose 4.48 per cent in dollar terms during February this year compared to the same month of the last fiscal. But, in rupee terms, export growth was flat with a mere 0.27 per cent rise, reflecting a dip in value of the Indian currency. Imports rose during the month under consideration and were 10.41 per cent higher (in dollar terms). However, traders may get some support with the IMF’s statement that India should see its growth picking up this year after two transitory shocks - the demonetisation and the GST - while China’s growth is likely to fall gradually. In its G-20 Surveillance Note Global Prospects and Policy Challenges ahead of the G-20 Finance Ministers meeting in Argentina next week, the International Monetary Fund said that globally growth is expected to revert to a weaker trend.

The US markets ended mostly in red on Thursday, as traders digested a slew of U.S. economic data, including a report from the Labor Department showing initial jobless claims edged lower in the week ended March 10th. Asian markets were trading mostly lower on Friday amid a backdrop of global trade-related developments and news out of Washington.

Back home, Indian equity benchmarks ended the Thursday’s trade in red terrain with frontline gauges declining below their crucial 10,400 (Nifty) and 33,700 (Sensex) levels. After making a cautious start, markets traded with marginal losses for most part of the session, as market participants opted to remain on sidelines ahead of balance of trade figure for the month of February to be released later in the day. Sentiments remained downbeat with a private report stating that the slowdown seen of late in India's export growth rate is likely to continue in February as well, thanks to a slow disbursement of Goods and Services Tax (GST) refunds, low growth in labour-intensive sectors and a volatile currency. Selling got intensified in last leg of trade which dragged markets to their lowest level. Investors remained concerned as Industry bodies said that RBI’s decision to ban Letters of Undertaking (LOUs) for trade credit for imports will have a disruptive impact, at least in the immediate term, as small businesses would require higher working capital. Traders took note of a report that the proceedings of the Lok Sabha were paralysed for the ninth consecutive day today as several parties, including NDA constituent TDP, continued their noisy protests over various issues, including the PNB scam and special status for Andhra Pradesh. Traders failed to take sense of relief with Fitch Ratings in its latest ‘Global Economic Outlook’ forecasting that the Indian economy is likely to grow at the rate of 7.3% in the next fiscal (FY19) and further to 7.5% in FY20. Traders shrugged off World Bank’s statement that India’s economy is expected to grow at 7.3% in the next financial year and accelerate to 7.5% in 2019-20, bottoming out from the impact of demonetisation and GST, even as it highlighted private investments and exports as the two lagging engines of growth. In its biannual publication, India Development Update, the World Bank said it expected Indian economy to clock a growth rate of 6.7% in the current financial year. Finally, the BSE Sensex declined 150.20 points or 0.44% to 33,685.54, while the CNX Nifty was down by 50.75 points or 0.49% to 10,360.15.