The Indian markets ended lower on Wednesday, with Nifty settling below 11,500 mark, as investor sentiment remained bearish amid a plunging rupee and weak global cues. Moreover, India’s August services sector activity fell from the 21-month high to 51.5 in August also dampened the sentiments. Today, the markets are likely to open in green after three sessions of losses as oil extended overnight losses on expectations of weaker demand from China and other emerging markets. Traders will be getting some support with Finance Minister Arun Jaitley’s statement that there is no need to worry over the steep fall in the Indian rupee’s value against the US dollar as the inherent strength of the country’s economy will aid in arresting the downtrend. Also, easing compliance burden for businesses, the Finance Ministry said that Goods and Services Tax (GST) refunds can be claimed by simply submitting a printout of GSTR-2A form to tax authorities instead of giving all purchase invoices of a month. Traders may take note of The Securities and Exchange Board of India’s (SEBI) statement that it would review an order tightening rules on foreign funds ownership by entities of Indian origin, after some fund managers said it could lead to massive dollar outflows. There will be some buzz in the steel sector stocks with ICRA’s report that sharp depreciation in the rupee is likely to help the domestic steel industry lower imports and boost exports in the coming months, which in turn may improve the country's overall steel trade balance. Also, there will be some reaction in sugar sector stocks as facing an unprecedented crisis of surplus production, the Indian sugar industry demanded the government hike the minimum sale price (MSP) of sugar to Rs 36 a kilo (kg), from the current Rs 29 and mandatorily fix a quota of export of 7 million tonnes (MT) for the 2018-19 season that starts from October.
The US markets ended mostly lower on Wednesday as trade tensions resurfaced ahead of more talks between the United States and Canada on revamping the North American Free Trade Agreement. Asian markets were trading mostly in red on Thursday amid ongoing concerns about emerging-markets.
Back home, extending southward journey for third straight session, Indian equity benchmarks ended the sluggish day of trade with a cut of over one third of a percent with frontline gauges breaching their crucial 11,500 (Nifty) and 38,100 (Sensex) levels. Soon after making a cautious start, markets started moving southward as sentiments remain dampened with report that the National Council of Applied Economic Research’s (NCAER) business confidence index (N-BCI) fell by 12.9% in July over April this year on a quarter-on-quarter basis on account of worsening of business sentiments across various segments. NCAER said the decline in the N-BCI on a year-on-year basis works out to be 15.9%. Some cautiousness also crept in with a private report that India’s growth rate is expected to moderate this fiscal despite a strong start in the April-June quarter largely owing to tighter financial conditions, limited fiscal headroom and upcoming elections. Adding to the pessimism, the National Stock Exchange (NSE) raised concern over potential for large-scale cyber-attacks on financial market infrastructure and called for setting up the standards to bring about the change through talent empowerment and investment in innovation. Markets extended southward journey and domestic bourses even went to test psychological 37,800 (Sensex) and 11,400 (Nifty) levels after India’s services sector activity fell in the month of August from July’s 21-month peak, primarily due to the weakest growth in new work. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index dropped to 51.5 in August from 54.2 in July, signaling the slowest growth in the current sequence. Besides, the Nikkei India Composite PMI Output Index which measures both manufacturing and services too fell to 51.9 in August from 54.1 in July. However, the key gauges got some support near those intraday low levels as they managed to trim some of their losses to end off day’s lows, as traders took some solace with Commerce and Industry Minister Suresh Prabhu’s statement that the proposed new industrial policy, to be released soon, would help link domestic industry with the global supply chain. Finally, the BSE Sensex declined by 139.61 points or 0.37% to 38,018.31, while the CNX Nifty was down by 43.35 points or 0.38% to 11,476.95.
