Markets likely to open in green on Wednesday

Late hour sell-off mainly dragged the Indian markets near intra-day low level to end the session in red territory on Tuesday as investors remained cautious amid mixed global cues. Today, the markets are likely to open in green, but the investors' sentiments are likely to remain subdued on worries about global economic growth. Traders may take note of a report that the Reserve Bank of India (RBI) will inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet the festival season demand for funds. It added that the government will purchase bonds with maturity ranging between 2020 to 2030. Besides, a another report stated that the US government’s development finance institution Overseas Private Investment Corporation (OPIC) is keen to invest in the development of India’s infrastructure, port and solar energy sectors. However, there may be some cautiousness with Moody’s Investors Service’s report that the excise duty cut on petrol and diesel is credit negative for India as it will reduce government revenue and increase fiscal deficit by 0.1 per cent to 3.4 per cent of Gross Domestic Product (GDP) in the year ending March 2019. Also, the earning of public sector oil marketing companies (OMCs) would be negatively affected as they also absorbed Rs 1 per litre cut in their pricing. Meanwhile, India has imposed an anti-dumping duty of up to $719 per tonne for five years on import of nylon filament yarn from the European Union (EU) and Vietnam following recommendations by the commerce ministry’s investigation arm DGTR. There will be some buzz in telecom sector stocks with a private report that rising bond yields and a weakening rupee are inflating telecom firms’ cost of borrowing and could force them to increase mobile tariffs.

The US markets ended mostly lower on Tuesday as traders kept an eye on treasuries amid renewed concerns about the outlook for interest rates. Asian markets were trading mixed on Wednesday following a volatile session for US equities and as yields on Treasuries retreated from a seven-year peak.

Back home, Indian equity indices closed extremely volatile session near their intraday low points on Tuesday, amid mixed global cues. The markets made a firm start, aided by Union Home Minister Rajnath Singh’s statement that India will be among the top three economies of the world by 2030 if it kept up its current pace of growth. Separately, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) report retained India’s economic growth forecast at 7.3% for the current year 2018. Traders took encouragement with DIPP Secretary Ramesh Abhishek’s statement that India is taking several steps, including hiring more manpower and increasing use of technology, to reduce time for granting patents and trademarks. Some support also came with a report stating that India is all set to emerge as the 11th wealthiest country in the world as its personal financial wealth is projected to grow by 13% to $5 trillion by 2022 from the current $3 trillion. But, the benchmarks soon turned choppy, amid credit rating agency CRISIL’s latest report that farmers’ income remain low in calendar year 2018, despite normal rainfall. The street got cautious with International Monetary Fund (IMF) stating that global growth has plateaued at 3.7% with its chief economist warning the world that there are clouds on the horizon and growth has proven to be less balanced than hoped. Key indices weakened further to settle the day with the losses of around half a percent on heavy selling towards the fag-end. Domestic sentiments got hit with reports that India fared poorly, ranking 147 out of 157 countries, in terms of its commitment to reducing inequality. Some concerns also came with another report showing that India is one of the most vulnerable countries for extreme weather events. Finally, the BSE Sensex tumbled 174.91 points or 0.51% to 34,299.47, while the CNX Nifty was down by 47.00 points or 0.45% to 10,301.05.