Benchmarks likely to make cautious start on Wednesday

Indian markets before going for a holiday fell for the sixth straight session on Monday, dragged down by profit-booking in select IT, banking, pharma and FMCG stocks. Today, the markets are likely to make a cautious start tracking lackluster global cues amid Indian economy growth concerns. Markets remain closed on Tuesday on account of Dussehra. Traders will be concerned about the Reserve Bank of India's (RBI) statement that the Indian economy which has largely been subdued in the past few quarters and signs of a slowdown have cropped up, is likely to face several more risks in the near term. There will be some cautiousness with report that India has moved down 10 places to rank 68th on an annual global competitiveness index, largely due to improvements witnessed by several other economies, while Singapore has replaced the US as the world’s most competitive economy. India, which was ranked 58th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF), is among the worst-performing BRICS nations along with Brazil (ranked even lower than India at 71st this year). Besides, the new managing director of the International Monetary Fund (IMF) Kristalina Georgieva warned of an economic slowdown in 2019 in 90% of the world. He added that in other emerging markets, such as India and Brazil, the slowdown is even more pronounced this year. Though, traders may take note of a report that Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi saw keen interest from foreign investors in emerging areas such as REITs and InvITs, which have a total asset size of more than $10 billion. Agriculture stocks will be in focus with a report that the overall food grain production is expected to increase marginally by 8.4 million tonne from the average output in the past five years at 140.57 million tonne in 2019 -20, with the best monsoons in 25 years. There will be some buzz in the telecom stocks with industry body COAI’s statement that mobile tower installations have reached only 60% of intended target of 1,00,000 towers annually, mainly due to delay in permission from local authorities and other structural issues. There will be some reaction in coal stocks with ICRA’s report that it expects the energy hungry nation's thermal coal imports to be more than 200 million tonnes in 2019/20, due to lower-than-expected production by state-run Coal India.

The US markets declined on Tuesday as investor optimism around the upcoming US-China trade talks faded. Asian markets are trading mostly lower on Wednesday as US visa restrictions on Chinese officials and the addition of more Chinese companies to a US trade blacklist weighed on investor sentiment.

Back home, Indian equity bourses failed to hold gains on Monday and ended in red. After a cautious start, markets remained positive for the most part of the session, taking support from Niti Aayog Vice-chairman Rajiv Kumar’s statement that with several steps taken by the government in the past couple of months to boost the economy, the country’s growth is expected to be around 6.5% this year, although it is lower than expected. Some relief also came among investors because of the Finance Ministry’s statement that the Reserve Bank's decision to lower benchmark lending rate will complement recent measures taken by the government to accelerate growth. But, in the last leg of trade, key indices slipped into negative terrain. Sentiments got hit with RBI’s survey showing that the consumer sentiment declined further, and people are less optimistic about their income to rise over the year ahead. The consumer confidence in September registered a steep fall to 89.4 from 95.7 in July this year. The consumer confidence has touched the lowest level in at least the last six years. The street overlooked Union Minister of State for Finance and Corporate Affairs Anurag Thakur’s statement that India will see heavy foreign investment in the next two years following the government's decision to cut corporate tax rates. Finally, the BSE Sensex fell 141.33 points or 0.38% to 37,531.98, while the CNX Nifty was down by 48.35 points or 0.43% to 11,126.40.