Markets to get marginally negative start on Friday

Indian markets ended range-bound session in red on Thursday led by fall in banking and IT heavyweights like Infosys, State Bank of India, HDFC Bank and IndusInd Bank. Today, the start is likely to be flat-to-negative amid weak cues from Asian peers. There will be some cautiousness with report that the government might be impelled to steeply cut its direct tax collection target, with growth in this regard slumping to 3.5 per cent up to mid-October from the same period in the earlier financial year, as against the Budget target of 17.3 per cent. However, some respite may come later in the day with Finance Minister Nirmala Sitharaman’s statement that efforts will be made to further simplify Goods and Services Tax, and expressed hope that it will help in further improving India’s ranking in the World Bank’s ease of doing business index. Some support may also come with report that notwithstanding global and domestic economic uncertainties, private equity funds recorded an all-time-high investment of $9.4 billion in the third quarter this year, driven by big-ticket transactions. Traders may take note of Director of Development Economics at the World Bank Simeon Djankov’s statement that India needs a fresh set of bold reforms in the next three to four years if it wants to be among the top 50 countries with ease of doing business. Besides, a private report indicated that the Reserve Bank of India may go for rate cuts in December as well as next year as a modest rise in recent inflation is outweighed by downside risks to the central bank's growth estimates. Non-banking finance companies (NBFCs) stocks will be in focus with report that the financial metrics of mortgage lenders and NBFCs could deteriorate further due to non-availability of funding and the possibility of large loans to builders turning into bad loans next year when the moratorium expires. There will be some reaction in telecom stocks with report that in a setback to telecom service providers, the Supreme Court has allowed the Centre's plea to recover adjusted gross revenue (AGR) of about Rs 92,000 crore from them. There will be some buzz in the sugar stocks with report that the country's sugar production is expected to decline by 12.38 per cent to 28-29 million tonnes in the 2019-20 marketing season starting this month, due to sharp fall in the output in Maharashtra. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended mostly higher on Thursday, with strong results from Tesla and Microsoft offsetting weak profits from Ford and some other companies. Asian markets are trading mostly lower on Friday amid a raft of lingering uncertainties, ranging from corporate earnings to the US-China trade war.

Back home, Indian equity benchmarks ended volatile day in red terrain on Thursday, despite firm global markets. Markets made a positive start, after India jumped 14 places to the 63rd position on the World Bank’s ease of doing business ranking, riding high on the government’s flagship Make in India scheme and other reforms attracting foreign investment. The country also figured among the top 10 performers on the list for the third time in a row. Adding some support, the commerce and industry ministry said that India has recorded continuous improvement in its ease of doing business ranking issued by the World Bank on account of steps taken by the government in this regard. But, bourses turned volatile to settle lower, as share of FPIs in domestic capital markets through P-notes stood at Rs 76,611 crore in September-end, registering the fourth consecutive month-on-month decline. Some concerns also came, after Fitch Ratings slashed India's GDP growth forecast in the current fiscal to 5.5% saying a large credit squeeze emanating from shadow banks has pushed economic growth to a six year low. Traders got cautious with Economist Intelligence Unit’s statement that India is not likely to benefit from the US-China trade tensions largely owing to existing policy barriers to large-scale production, strict labour laws & difficult land-acquisition process. Finally, the BSE Sensex fell 38.44 points or 0.10% to 39,020.39, while the CNX Nifty was down by 21.50 points or 0.19% to 11,582.60.