Markets to make negative start amid sluggish global cues

Indian equity markets ended lower for the sixth consecutive session on Wednesday amid across-the-board selling and weak global cues. Today, the start is likely to remain weak on sluggish global cues. Traders will remain concern on report that continuing to voice concerns over populist measures, the Reserve Bank of India (RBI) has warned that income support schemes and farm loan waivers would lead to fiscal slippages for the states. The RBI listed out specific factors that would drive fiscal slippages in the revised estimates of 2018-19, including farm loan waivers and income support schemes. There will be some cautiousness too with former Finance Minister P Chidambaram’s statement that macro economic indicators confirm that the Indian economy has entered a disastrous phase of slowdown. He further added the Finance Ministry's report is a damning indictment of the state of the economy in the country. This is perhaps the weakest point in the economy, adding the next government has a lot of work to repair the economy to which the BJP has done great damage. Meanwhile, the technical report of the National Sample Survey Office (NSSO) has generated controversy following its observation that as much as 36 per cent units forming part of MCA-21 database, used in computing GDP, could not be either identifiable or traceable in the field.  However,  some respite can come later in the day on report that India is expecting improvement in its ranking in the World Bank's doing business report this year particularly in indicators such as paying taxes and trading across borders. In its annual Doing Business report, the World Bank ranks nations based on 10 parameters relating to starting and doing business in a country.  These parameters include ease of starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts and resolving insolvency.  The banking sector stocks will be in action after ICRA said that Financial creditors would realise more than Rs 80,000 crore in this financial year from the Insolvency and Bankruptcy Code (IBC) mainly driven by two large accounts Essar Steel and Bhushan Steel and Power.  This is 21% higher compared to about Rs 66,000 crore realised in the last financial year. Both Essar Steel and Bhushan Steel and Power are part of the RBI’s list of the 12 largest defaulting companies announced in June 2017. There will be some buzz in the Aviation stocks as the International Air Transport Association (IATA) stated that the growth of India's domestic passenger market fell to 3.1% in March as compared to 8.3% in February as there was reduction in flight operations of Jet Airways and disruptions at Mumbai airport due to construction.

The US markets settled mostly lower on Wednesday after swinging between gains and losses throughout the session, as investors contended with mixed signals around a potential US-China trade deal. Asian markets traded lower in early deals amid growing concerns about the latest US-China trade talks.

Back home, Indian equity benchmarks extended their sluggish run on Wednesday, with the both larger peers, the Sensex and the Nifty plunging over a percent each, on the back of weak cues from global markets. After a negative start of the day, key indices remained under the grip of bears throughout the day, as US Commerce Secretary Wilbur Ross warned that any retaliatory tariff by India in response to the United States' planned withdrawal of trade privileges will not be appropriate under WTO rules. India has raised the prospect of higher import duties on more than 20 US goods if US President Donald Trump presses ahead with a plan announced in March to end the Generalized System of Preferences (GSP) for India. India is the biggest beneficiary of GSP, which allows preferential duty-free imports of up to $5.6 billion from the South Asian nation.  Markets saw further fall in the last leg of the trade and ended near their intraday low points. Domestic sentiments got hit, amid reports that direct Tax collections fell short by Rs 82,000 crore at Rs 11.18 lakh crore during 2018-19 with lower corporate tax collections emerging as one of the reasons for the lower mop. The government had set a target of Rs 12 lakh crore. The markets participants were pessimistic, as US Labour Secretary Alexander Acosta told US lawmakers that the Trump administration is proposing a hike in the H-1B visa application fee to raise funds for the expansion of an apprentice programme which trains American youth for technology sector jobs. The street paid no heed towards a private report that the number of business-to-business (B2B) startups jumped four times to 3,200 in 2018 from 800 in 2014, enabling faster growth of the ecosystem, attracting investments worth $3.7 billion from $797 million, during the period. Finally, the BSE Sensex slipped 487.50 points or 1.27 % to 37,789.13, while the CNX Nifty was down by 138.45 points or 1.20% to 11,359.45.