Markets likely to make cautious start on Thursday

Indian markets ended Wednesday’s volatile session in green territory for a fourth consecutive day, mainly on the back of late hour buying. Today, the markets are likely to make a cautious start amid mixed cues from Asian peers and rise in crude oil prices. Traders will be concerned with a report that amidst the deepening slowdown across the economy, commercial credit demand has contracted 2.6 percentage points to Rs 63.80 lakh crore in the June quarter over the three months to March period, accompanied by a steep deterioration in asset quality. Also, there will be some cautiousness with private report that foreign portfolio investor (FPI) interest in Indian corporate bonds has been waning over the last few months, with their investments hitting a 10-month low in October, as the perception on credit risk of Indian companies continued to deteriorate because of slowing demand, rising stress across sectors like real estate and NBFCs and a bearish view on the rupee. However, some support may come later in the day with Finance minister Nirmala Sitharaman’s statement that more reforms are on the anvil this fiscal to boost growth as fresh economic data and subdued corporate earnings point to a deeper economic downturn. Traders may take note of Commerce Minister Piyush Goyal’s statement that India will maintain a slow & steady approach on the issue of trade deals. Meanwhile, India's fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption. The Petroleum Planning and Analysis Cell (PPAC) data showed that consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year. Banking stocks will be in focus with report that credit growth at Indian banks has dropped to its lowest level in nearly two years, the latest Reserve Bank of India (RBI) data shows, as slowing domestic consumption weighs on demand. There will be some buzz in the telecom stocks with report that the Telecom Department (DoT) is trying to get more spectrum free in the 3.3-3.6 Ghz band for 5G services. There will be lots of earnings announcements too, to keep the markets in action.

The US markets ended lower Wednesday as economic data suggested consumers were holding back on spending in the face of trade tensions and a global economic slowdown. Asian markets are trading mixed on Thursday as soft US retail sales data raised concerns about the health of the world's largest economy.

Back home, Indian equity benchmarks managed to settle a volatile session on positive note on Wednesday. The start of the day was optimistic, supported with the Reserve Bank of India’s (RBI) data report showing that India’s services exports rose by 10.4% to $18.24 billion in August in the current financial year. The services exports or receipts were $16.53 billion in the same month of 2018. It was at $19.08 billion in July this year. Market participants got relief with the World Bank’s statement that India has halved its poverty rate since the 1990s and achieved a seven plus growth rate over the last 15 years. It also said that India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods. But, volatility emerged over the markets during the session, as the International Monetary Fund (IMF) cut India’s GDP growth projection for the year 2019 to 6.1%, which is 1.2% down from its April projections and noted that the Indian economy is expected to pick up the next year at 7.0 % in 2020. The street also got cautious as tax officers expressed concerns over the faceless income tax assessment system initiated by the Central Board of Direct Taxes, saying it will create procedural difficulties and may hit revenue collections. However, indices managed to end in green terrain, after Chief Economic Advisor K V Subramanian called upon the industry to start making investments, stressing that the fundamentals of the economy are very strong. Finally, the BSE Sensex gained 92.90 points or 0.24% to 38,598.99, while the CNX Nifty was up by 35.70 points or 0.31% to 11,464.00.