Benchmarks likely to make cautious start on Tuesday

India markets ended Monday’s choppy trading session lower, with cut of around half a percent, amid sharp rise in crude oil prices coupled with weak rupee. Today, the start of the session is likely to be cautious on mixed cues from Asian peers amid higher oil prices. However, traders may be getting encouragement with the World Bank’s report stating that India's GDP growth is expected to accelerate moderately to 7.5 per cent in Fiscal Year 19-20, driven by continued investment strengthening, particularly private-improved export performance and resilient consumption. Data for the first three quarters suggest that growth has been broad-based. Industrial growth accelerated to 7.9 per cent, making up for a deceleration in services. Traders may take note of a report that the Reserve Bank of India (RBI) has come out with guidelines for banks to set up new currency chests, which include minimum area of 1,500 square feet for strong room. Besides, the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. For those situated in the hilly/ inaccessible places, capacity of 2.1 lakh pieces of banknotes per day. Meanwhile, a report stated that the new Central government will undertake a thorough review of the public sector banks (PSBs) soon after taking office. As per the report, with the announcement of elections, it has been decided to hold the review meeting of banks only after a new government is in place. The review will study plans for the recapitalisation of banks besides taking note of their NPA (non-performing assets) recovery target as well as the next merger exercise. There will be some buzz in the auto industry stocks with report that auto industry has approached the government to cut Goods and Services Tax (GST) on passenger vehicles and two-wheelers from 28% to 18% to compensate the sector, which is expected to see price hike in range of 10-15% with the coming of new emission and safety regulations. Besides, Society of Indian Automobile Manufacturers’ (SIAM) data showed that Indian automotive industry saw marginal increase of 5% at 26,267,783 units in Financial year 2018-2019. The second half of last fiscal witnessed subdued growth across all segments.

The US markets settled mostly higher on Monday, as investors geared up for a new earnings season. Asian markets are trading mixed on Tuesday as investors watched developments such as the renewed conflict in key oil producer Libya.

Back home, Indian equities ended Monday’s trading session on negative note, with Sensex and Nifty losing over 160 and 60 points, respectively. The markets made a slightly higher start of the day, aided by Finance Minister Arun Jaitley’s statement that India is expected to become the third largest economy in the world by 2030 with GDP touching $10 trillion, helped by consumption and investment growth. Currently, the size of the Indian economy is about $2.9 trillion. Talking about avenues of growth for the next 20 years, the finance minister listed infrastructure creation, rural expansion and gender parity, among others. Adding some support, World Bank Chief Economist for the South Asia Region, Hans Timmer said that India’s economic growth in recent years has been too much driven by domestic demand and its exports were about one third of its potential. However, key equity indices soon turned volatile to settle the session in red terrain, on the back of mixed cues from global markets. Domestic sentiments also got impacted with a ratings agency’s latest report that Indian IT majors hit due to H1-B visa restrictions. It said that Restrictions on the H1-B visas by the US have compelled Indian tech companies to hire more locally and led to an escalation in employee costs. Market participants also remained on sidelines ahead March-quarter corporate earnings along with inflation data due to release on April 12. Investors took a note of Commerce and Industry Minister Suresh Prabhu’s statement that there is a need to develop a proper matrix to understand changes in the Indian economy and job creation that is happening at a rapid pace. He also stated that the relation between employment generation to Gross Domestic Product (GDP) will always undergo a change depending upon the profile of the economy. Finally, the BSE Sensex slipped 161.70 points or 0.42% to 38,700.53, while the CNX Nifty was down by 61.45 points or 0.53% to 11,604.50.