Markets to make negative start on feeble global cues

Indian equity benchmarks gave up earlier gains to end with marginal gains on Tuesday, tracking mixed global cues. Today, the markets are likely to make negative start amid weak global cues. Sentiments will remain downbeat on report that Fuel prices hit a fresh record high on Tuesday as petrol prices rose 30 paise to Rs 84.70 per litre in Mumbai. Similarly, diesel prices rose 27 paise to Rs 72.48 per litre in Mumbai. Markets may get some support later in the day on private report that an open data ecosystem will impact India’s GDP by $22 billion, or the equivalent of two times the amount raised through the sale of 4G spectrum in 2017. The report claims that an open data ecosystem has the power to double farmers’ income by 2022, provide Universal Health coverage and provide microloans to three million plus micro, small and medium enterprises among other benefits. Aviation stocks will be buzzing on report that Civil Aviation Ministry will urge the Finance Ministry to bring the particular fuel type under the ambit of GST. In this regards, a proposal will be made to the Ministry of Finance to bring air turbine fuel (ATF) under the ambit of GST to contain the rise in jet fuel cost due to high global crude oil prices. There will be buzz in Chemical related stockson report that Commerce Ministry’s investigation arm DGAD has said it is terminating its anti-dumping probe into import of a Chinese chemical used in dye industry. The move comes following domestic industry's request to terminate the probe in the imports of Meta-Phenylene Diamene-4-Sulphonic Acid from the neighbouring nation.

The US markets ended lower on Tuesday, unable to sustain positive momentum from the previous session despite overtures from China. Asian stocks are broadly lower, with benchmark indexes in China, Hong Kong and Japan down between 0.4 percent and 1.1 percent, as investors eyed risks from North Korea to Turkey.

Back home, snapping five days losing streak, Indian equity benchmarks ended the volatile day of trade with modest gains on Tuesday. After making a cautious start, key gauges gained traction as traders took some encouragement with ICRA expecting the Gross Domestic Product (GDP) growth to improve to 7.4% in January-March 2017-18 from 7.2% in the third quarter, on account of good rabi crop harvest and improved corporate earnings. The Central Statistics Office (CSO) is scheduled to come out with GDP estimate for the fourth quarter (Q4) of fiscal 2017-18 and provisional annual estimates for the year 2017-18 on May 31. Some support also came with NITI Aayog’s vice-chairman Rajiv Kumar exuding confidence that Indian economy will achieve 9% growth rate on sustained basis by 2022 on the back of reforms like GST, demonetisation and the Insolvency and Bankruptcy Code (IBC). Some relief also came with report that the central government’s capital expenditure (capex) in April 2018 saw a jump of 48% compared with the same month last year, the consequence of a second consecutive year of an advanced budget. The biggest gainers as a result of this capex boost were ministries of defence, railways and road transport. However, gains remained capped as anxiety remained among the traders with a foreign brokerages’ report stating that rise in oil prices may lead to inflationary trends in the country, forcing the Reserve Bank of India (RBI) to hike rates by 0.25% in the August policy review. It further noted that the apex bank, however, may opt for a status quo in rates at the forthcoming review in June. Some concerns also came with SBI’s Ecowrap report stating that India’s current account deficit is expected to widen to 2.5% of the GDP in the financial year 2018-19, on the back of rise in the crude oil prices. Finally, the BSE Sensex rose 35.11 points or 0.10% to 34,651.24, while the CNX Nifty was up by 20.00 points or 0.19% to 10,536.70.