Markets to make optimistic start

Indian equity indices gave up all of the early gains to end flat with marginal losses on Wednesday, despite a drop in global crude oil prices as well as a strengthening rupee. Higher wholesale inflation print and disappointment surrounding corporate earnings capped any up-move. Today, the markets are likely to start on positive note despite weak global cues. Traders will also be getting some support with Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra stating that direct tax collection has already crossed Rs 5 lakh crore that is 44% of the net direct tax collection target and will exceed the budgeted target of Rs 11.5 crore set for the current fiscal. He further highlighted that so far the I-T department has issued refunds to 2.15 crore assessees amounting to Rs 1.15 lakh crore and from now onwards the net collections will increase. Traders further may get some encouragement as the Confederation of Indian Industry (CII) called for a change in regulations to improve access to credit for micro, small and medium enterprises (MSME), which the lobby group says are facing increased risk of financial stress due to a liquidity crunch in the market. Also, the government and Reserve Bank seem to be veering around to reach an agreeable solution particulary with respect of relaxation of the Prompt Corrective Action (PCA) framework and easing of lending norms for the MSME sector ahead of the RBI board meeting on November 19. As a result of relaxation, some banks may come out of the PCA framework by the end of the current fiscal. The renewable energy stocks will be in action on report that India’s renewable energy space is turning out to be an attractive domain for foreign investors. Over the next four years, the renewable energy sector is projected to attract investments pegged at $80 billion. More than $42 billion has been invested in the country’s renewable energy sector since 2014. There will be some buzz in the Agriculture stocks on report that Agriculture Minister Radha Mohan Singh has launched Rs 1000 crore start-up scheme to encourage youth to join cooperative business ventures in agriculture and allied sectors.  Apart from a subsidy for the entrepreneur, the scheme also makes available an interest subvention of 2% per annum.

The US markets end lower on Wednesday, with the Dow Jones Industrial Average logging its longest losing streak in 3-month, as blue-chip Apple Inc. flirted with bear-market territory. Cautiousness prevailed in the markets on report that Congresswoman Maxine Waters, D-Calif., who is expected to take over the powerful House Financial Services Committee in the next Congress. Asian markets are trading mostly in red on Thursday following the losses on the Wall Street.

Back home, Wednesday turned out to be a volatile day for the Indian markets, as both Sensex and Nifty ended flat with a negative bias after altering between green and red terrain. The start of the trading session was cheerful, amid reports that the Reserve Bank (RBI) will infuse Rs 12,000 crore into the system through purchase of government securities on November 15, with an aim to ease tight liquidity situation. Traders also got encouragement as the Securities and Exchange Board of India (SEBI) tightened disclosure and review norms for credit rating agencies (CRAs). SEBI ordered CRAs to analyse deterioration in the liquidity conditions of an issuer, while monitoring its repayment schedules and taking into account any asset-liability mismatches. These measures will enable investors to understand underlying rating drivers better and make more informed investment decisions. Sentiments were also positive during early morning deals with Prime Minister Narendra Modi’s statement that financial inclusion has become a reality for 1.3 billion Indians as he pitched India as a favourite investment destination at the Fintech Festival. However, key indices gave up their early gains and traded volatile throughout the session, after WPI inflation spread concerns on street by rising 4-month high to 5.28% in October from 5.13% in September and 3.68% during the corresponding month of the previous year. The mood of the market participants got affected with a private report stating that the overall hiring sentiment for the second half of this financial year has declined by 3% to 92% with persisting currency and oil pricing concerns in the country. Traders also got worried as the CriSidEx index showed that sentiment among micro and small enterprises (MSEs) dipped marginally in the quarter ended September, compared to the last three months. The CriSidEx index stood at 124 in Q2 FY19, marginally lower than 127 in Q1. Adding more concerns, a private report showed that the liquidity crisis at non-bank lenders and higher interest rates seem to have rattled chief financial officers (CFOs) of India Inc and resulted in their optimism to slip to a 19-quarter low. Finally, the BSE Sensex lost 2.50 points or 0.01% to 35,141.99, while the CNX Nifty was down by 6.20 points or 0.06% to 10,576.30.