Markets likely to open in red tracking mixed cues from Asian peers

Indian markets snapped tow-day losing streak and ended higher on Tuesday mainly on the back of late hour buying amid positive leads from Asian markets coupled with persistent foreign fund inflows. Today, the start is likely to be in red tracking mixed cues from Asian peers amid global growth concerns. On the domestic front, there will be some cautiousness as former Reserve Bank of India (RBI) Governor Raghuram Rajan expressed doubts over Indian economy growing at 7 per cent when not enough jobs were being created and said the current cloud over the Gross Domestic Product (GDP) numbers must be cleared by appointing an impartial body to look at the data. Meanwhile, he said that India needs to focus on the resolution of farm distress rather than loan waivers which kill the credit culture. He added that the other focus area should be creation of jobs which the people want. However, some support may come with report that the RBI has received a good response to its dollar swap window on March 26, establishing the instrument as a credible liquidity tool and paving the way for more such auctions in the coming months. Banks offered $16.31 billion for the proposed swaps of up to $5 billion. The RBI accepted $5.02 billion at a cut-off premium of Rs 7.76 for three-year dollars - close to the rate at which the market was trading at. Besides, a private report indicated that although 2018 brought some cyclical challenges, India maintains top ranking in overall consumer sentiment, while Brazil has overtaken China to come second. There will be some reaction in power sector stocks with the secretary of ministry of renewable energy’s statement that India will launch $5 billion of transmission-line tenders in phases, beginning in June, to route a targeted 175 gigawatts (GW) of power from renewable sources into the country's grid by 2022. Meanwhile, state-owned Rail Vikas Nigam (RVNL) has fixed a price band of Rs 17-19 per equity share for its upcoming initial public offering (IPO), which would run from March 29-April 3, to raise about Rs 481 crore.

The US markets rose on Tuesday as investors overlooked lackluster housing and consumer data, with energy and pharmaceutical stocks among the leaders. Asian markets are trading mixed on Wednesday amid lingering fears that the global economy is slowing down.

Back home, Indian equity benchmarks bounced back on Tuesday to settle trading session with strong gains of over a percent. After slightly higher start, the markets traded lackluster with marginal gains for the most part of the day, affected by a private report stating that food inflation in the country is likely to go up to 2 percent in fiscal year 2019-20 from the 0.7 percent estimated for FY19. Adding some worries among the market participants, the Employees State Insurance Corporation (ESIC) in its latest ‘payroll data’ report said that job creation dropped by 6.91% in January 2019 to 11.23 lakh as compared to 12.06 lakh in the same month last year. Market gains were also limited, with state-run India Meteorological Department’s (IMD) statement that its study of global models shows that there is little chance of a strong El Nino in 2019. A strong El Nino could have an adverse impact on India’s southwest monsoon that starts from June as almost 80 per cent of El Nino years have seen below normal rains. However, the key indices gained the momentum in the last hours of the trade to settle near day’s high points. Domestic sentiments got boost with the finance ministry’s statement that the liquidity situation in the economy was comfortable, and it will improve further with the central bank’s move to infuse Rs 35,000 crore through the rupee-dollar swap arrangement, announced last week. Investors took encouragement, after the Vice President of India, M. Venkaiah Naidu called for a renewed focus on agribusiness, value addition and diversification of agriculture to make farming much more sustainable, profitable and rewarding. Some support also came with a report stating that India's share in the final consumption of consumer goods is expected to double by 2030 and the favourable demographics will soon take it ahead of China in regional market dynamics. Some relief also came with reports that the commerce ministry introduced an online system for exporters to obtain export licence for restricted category goods, a move aimed at promoting paperless work and ease of doing business. Finally, the BSE Sensex rose 424.50 points or 1.12% to 38,233.41, while the CNX Nifty was up by 129.00 points or 1.14% to 11,483.25.