Benchmarks likely to make slightly negative start

Indian markets ended rang bound trade in red on Monday, tracking losses in HDFC Bank, RIL and TCS amid rising concerns over economic slowdown. Today, the markets are likely to make flat-to-negative start amid mixed cues from Asian peers. There will be some cautiousness with a private report indicating that India’s real Gross Domestic Product (GDP) growth is likely to average at 5 per cent in calendar year 2019, as against 7.4 per cent last year, before picking up to 6.3 per cent in 2020 and 6.8 per cent the next year. Also, there will be some concern with the another report highlighting that India has slipped 6 places to 59 rank on a global annual list of 63 countries, due to low quality of life and expenditure on education. Though, some respite may come later in the day with Union Minister Anurag Thakur’s statement that India is not facing 5 per cent economic slowdown and continues to be the fastest growing economy in the world. Thakur also said that a number of steps are being taken by the government to strengthen the economy that includes merger of banks and tax concessions to industries. Meanwhile, leading bourse NSE said it has introduced the facilitation of subscription in State Development Loans (SDLs) through its e-Gsec platform that will enable retail participation in securities issued by state governments. There will be some buzz in the telecom stocks with report that the telecom regulator expects to finalize its views on the contentious call connect charges issue by the end of this month. Aviation stocks will be in focus with Directorate General of Civil Aviation’s (DGCA) report that indicating some recovery in the aviation sector due to the tourist season, the domestic air passenger traffic this October increased by 3.98 per cent compared to the same month last year. There will be some reaction in NBFC stocks with report that the Reserve Bank can now seek resolution of non-banking financial companies having assets worth of at least Rs 500 crore under the insolvency law, a move that is likely to help in addressing woes in the NBFC sector. Also, metal stocks will be in focus with repro that India's finished steel exports dipped 33.9 per cent to 6.36 million tonne (MT) in 2018-19, amid the government's efforts to keep the country as the net exporter of the metal.

The US markets ended higher with marginal gains on Monday as investors waited for concrete progress on US-China trade relations after mixed headlines. Asian markets are trading mixed on Tuesday as another day awaiting clearer news on the progress of US-China trade negotiations weighed on jaded investors' sentiment.

Back home, volatility pulled Indian equity markets lower on Monday, with Sensex & Nifty ending in red terrain. The start of the day was positive, aided with Finance Commission Chairman N K Singh’s statement that the current economic slowdown is episodic & expressed hope that sluggishness will not continue for long. However, key indices soon turned volatile, after economic think-tank National Council of Applied Economic Research (NCAER) said that India’s economic growth is likely to decline to 4.9% in the second quarter of this fiscal.  Besides, the think-tank pegged Gross Domestic Product growth at 4.9% as for the full fiscal 2019-20 against 6.8% in 2018-19. Key benchmarks remained below their respective neutral lines for the most part of the trading day, as India’s merchandise exports contracted by 1.11% in October 2019 as compared to same period of last year, mainly on account of a significant dip in shipments of petroleum, carpet, leather products, rice and tea. Trade deficit, gap between imports and exports, narrowed to $11.01 billion in October from $18.0 billion a year ago. Market participants paid no heed towards Confederation of Indian Industry (CII), Director-General Chandrajit Banerjee’s statement that Indian Public Sector Enterprises can become globally competitive. Finally, the BSE Sensex fell 72.50 points or 0.18% to 40,284.19, while the CNX Nifty was down by 10.95 points or 0.09% to 11,884.50.