Markets likely to make cautious start on Wednesday

Indian markets continued their southward journey for fourth straight session and ended marginally in red on Tuesday amid heavy selling by foreign investors. Today, the markets are likely to make a cautious start amid mixed cues from Asian peers. There will be some cautiousness with report that the International Monetary Fund (IMF) projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3 per cent for both the years, saying its GDP will now grow respectively at the rate of 7 and 7.2 per cent reflecting a weaker-than expected outlook for domestic demand. Though, it also said India will still be the fastest growing major economy of the world and much ahead of China. However, some support may come with Minister of Shipping Mansukh Mandaviya’s statement that the Centre plans to bring down logistics cost down from 14 percent of the GDP to 9 percent. Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has launched Utkarsh 2022, the central banks' medium-term strategy framework, in line with evolving macro-economic environment. The framework has been launched to achieve excellence in the performance of RBI's mandates and strengthening the trust of citizens and other institutions. Besides, five state-run banks- State Bank of India, Union Bank of India, Oriental Bank of Commerce, Corporation Bank and Andhra Bank will offer in-principle approval up to Rs 5 crore to MSME borrowers through PSB Loans in 59 Minutes platform. There will be some buzz in the sugar stocks with report that Cane dues to be paid by sugar mills to farmers has come down to Rs 15,222 crore so far in marketing year 2018-19, that will end in September, because of government's intervention. There will be some reaction in housing finance companies stocks amid CARE Ratings’ report that the National Housing Bank's (NHB) direction on interest subvention products is likely to have an impact on the sales velocity of the developers. It added that the loan book growth of the housing finance companies (HFCs) is likely to be affected owing to this dip in sales. There will be some earnings announcements too to keep the markets buzzing.

The US markets ended higher on Tuesday amid reports that face-to-face talks between US and Chinese trade negotiators would begin next week. A batch of stronger-than-expected earnings also lifted investors’ sentiment. Asian markets are trading mixed on Wednesday amid hints of progress in the Sino-US trade saga.

Back home, key Indian equity indices finished Tuesday’s trading session in red terrain, with Sensex and Nifty falling 0.13% each. After a cautious start, markets managed to trade in green terrain for the most part of the session, amid reports that the government has set a target of adding 1.3 crore income tax filers in the current financial year against 1.1 crore new filers last year. Some relief also came after the Ministry of New and Renewable Energy (MNRE) issued guidelines for rollout of the Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM-KUSUM) Scheme, with a central aid of Rs 34,422 crore to provide financial and water security to farmers through harnessing solar energy capacities of 25.75 gigawatt (GW) by 2022. But, key indices slipped in red terrain in the last leg of trade to close the lackluster day on negative note. Domestic sentiments got hit, after outgoing Reserve Bank of India Deputy Governor Viral Acharya said that an increase in government borrowing runs the risk of flooding the debt market, and puts upward pressure on interest rates, making it more expensive for companies to borrow. The market participants got anxious, as the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) slipped to Rs 81,913 crore at June-end. Finally, the BSE Sensex lost 48.39 points or 0.13% to 37,982.74, while the CNX Nifty was down by 15.15 points or 0.13% to 11,331.05.