Markets to start slightly in green on Thursday

Indian equity benchmarks edged lower on Wednesday amid continued selling by foreign funds as oil stayed at multi-year peaks and the rupee traded near 17-month low against the dollar. Today, the markets are likely to start slightly in green with dovish Fed minutes as well as a drop in crude oil prices likely to offer some support after recent heavy losses. Traders will get some support with report that India’s direct tax collections for the last financial year crossed the Rs 10 lakh crore mark, registering an increase of 18 per cent over the previous fiscal. Some support will also come with report that India has moved one notch higher, to the 44th place in terms of competitiveness, in the annual rankings compiled by International Institute for Management Development (IMD) which placed the US in the top slot. The US became the most competitive economy globally driven by its strength in economic performance and infrastructure, followed by Hong Kong and Singapore in the second and third place, respectively. Traders will also react to union minister Ravi Shankar Prasad’s statement that the government is working on a long-term solution to fuel prices. Meanwhile, the government has cleared amendments to the Insolvency and Bankruptcy Code (IBC), incorporating changes suggested by a government-appointed panel.

The US markets ended higher on Wednesday, following the release of the minutes of the latest Federal Reserve meeting. Asian markets are trading mostly in red on Thursday as investors fretted about new setbacks in US-China trade talks, however losses remained capped as negative sentiment was tempered by US Federal Reserve meeting minutes suggesting it would not raise the tempo at which it increases interest rates.

Back home, Wednesday turned-out to be a disappointing day of trade for Indian equity benchmarks, with frontline gauges ending below their crucial 34,400 (Sensex) and 10,450 (Nifty) levels, on the back of high fuel prices and weakness in rupee. Markets started the session on pessimistic note as sentiments remained 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. Anxiety spread among investors as former Union Finance Minister P Chidambaram criticised the Centre for the fuel price hike and claimed that the rate can be reduced by Rs 25 per litre but the government is not doing it. Traders paid no heed towards Employment Provident Fund Organisation’s (EPFO) latest ‘Overall Payroll Data’ report showing that India created 39.36 lakh new jobs in seven months period till March 2018. As per the report, total 6,13,134 new payrolls were created during March 2018 as against 5,89,034 created in the previous month, registering a growth of 4.09%. Selling got intensified in second half of the trade after rupee touched fresh 16-month low of 68.29 against US Dollar. The market participants overlooked report that the agriculture ministry released the Model Contract Farming Act, 2018, which lays emphasis on protecting the interests of farmers, considering them as weaker of the two parties entering into a contract. Traders shrugged off 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. Finally, the BSE Sensex declined 306.33 points or 0.88% to 34,344.91, while the CNX Nifty was down by 106.35 points or 1.01% to 10,430.35.