Benchmarks likely to make cautious start on Thursday

Indian markets ended lower on Wednesday on growth worries after the International Monetary Fund (IMF) cut its growth forecast for India and the global economy, citing heightened trade tensions. Today, the markets are likely to make a cautious start tracking mixed cues from Asian peers. Investors may remain cautious as the first phase of general elections start today. There will be some cautiousness with Federation of Indian Export Organisations’ (FIEO) statement that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months. It added that the WTO has already cautioned that the global trade growth is expected to be lower in 2019 than it was last year. However, some support may come later in the day with IMF’s statement that some reforms in India have shown the benefits of digitalisation which has also reduced the opportunities for discretion and fraud. Meanwhile, the government has extended the last date for filing final sales return form GSTR-1 for March by two days till April 13. Similarly, the due date for furnishing tax deducted at source (TDS) return GSTR-7 for March has also been extended till April 12. There will be some buzz in the banking sector stocks with report that the government's large capital infusion of around Rs 60,000 crore during the last quarter would help public sector banks to improve their provision coverage ratio (PCR) because of which they are likely to report higher losses for the fourth quarter ended March 31, 2019. On the other hand, private banks will be able to improve their profitability sequentially and on a year-on-year basis. There will be some reaction in the pharma sector stocks with report that the pharma industry will have to wait for the return of double-digit growth as the industry is expected to witness a moderate growth of 8 to 10 per cent till FY21. The pricing pressure in the US generic market will continue to be a concern for the industry. There will be some buzz in the agriculture sector stocks with the Agricultural and Processed Food Products Export Development Authority’s (APEDA) data showing data the country's exports of agricultural and processed food products have dipped by 2.27 per cent to $16.27 billion during the April-February period of 2018-19, on account of contraction in shipments of buffalo meat, wheat and non-basmati rice.

The US markets ended higher on Wednesday after Federal Reserve meeting minutes suggested no shift in the central bank's dovish tilt. Asian markets are trading mixed on Thursday on expectations global interest rates will stay lower for longer after a dovish turn by the European Central Bank and milder than expected US inflation.

Back home, Indian equity markets ended Wednesday's session on bearish note, as Sensex and Nifty settled with losses of over 350 and 85 points, respectively. The markets started on a cautious note, after the International Monetary Fund (IMF) lowered Gross Domestic Product (GDP) outlook for India. The IMF has moderately scaled down India’s economic growth projection to 7.3 per cent for the current financial year from its earlier forecast of 7.4 per cent and suggested that the country should continue to undertake economic reforms, including hire and fire, to create jobs. Trading sentiments also remained lackluster with the finance ministry’s statement that the government has fallen short of Rs 50,000 crore in its direct tax collection target of Rs 12 lakh crore for 2018-19. Key indices extended their losses in last hours of trade to settle near their day’s low points. The markets participants remained worried, as the IMF cut its global growth forecast to the lowest level since the financial crisis, warning of significant downside risks to the world economy including trade tensions, pockets of political instability, mounting debt levels and increasing inequality. The IMF lowered its growth forecast for 2019 to 3.3 percent from the previous level of 3.5 percent in its latest World Economic Outlook (WEO). The street paid no heed towards a report stating that the government has managed to meet the revised fiscal deficit target of 3.4 percent of the GDP after it cut last minute expenditure and rolled over fuel subsidies to make up for the shortfall in tax collection. Finally, the BSE Sensex slipped 353.87 points or 0.91% to 38,585.35, while the CNX Nifty was down by 87.65 points or 0.75% to 11,584.30.