Markets likely to make cautious start amid growth concerns

Indian markets gave up early gains and ended lower on Tuesday as investors booked profits at higher levels amid mixed cues from global markets. Today, the markets are likely to make a cautious start amid economic growth concerns and ahead of expiry of the Futures and Options contracts, slated for Thursday. Fitch group firm India Ratings and Research said Indian economy may have slowed for the sixth consecutive quarter in July-September to 4.7 per cent and it lowered GDP growth forecast for current fiscal for the fourth time. However, some support may come with Union minister Piyush Goyal’s statement that India's service sector can help achieve the Central government's target of $5 trillion GDP. He said the service sector has the potential to be the largest job creators in the country and over the next five years it has the potential to contribute $3 trillion out of the $5 trillion GDP target set by the government. Traders may take note of a private report that the Reserve Bank of India is expected to cut interest rates in its December bi-monthly monetary policy and again before July. There will be some reaction in infra stocks with rating agency Crisil’s report that states need to scale up investments to Rs 110 lakh crore over the next decade to achieve India's massive infrastructure targets. Metal stocks will be in focus with a private report indicating that with the leases of 232 merchant iron ore mines expiring in March next year, the country may face a short-term disruption in supply of the main ingredient used in making steel. There will be some buzz in the telecom stocks amid reports that the Committee of Secretaries (CoS) formed to suggest relief measure for struggling telecos has been disbanded.

The US markets ended higher on Tuesday as upbeat comments by President Donald Trump on trade talks eclipsed some softer-than-anticipated economic data. Asian markets are trading mostly in green on Wednesday as more upbeat signals from US-China trade talks fanned hopes of an imminent end to tariff hostilities, which helped offset concerns about a slowing US economy.

Back home, Indian equity bourses gave up all of their gains on Tuesday to end on lower note. Markets made a fabulous start, aided with Union Minister Nitin Gadkari’s statement that the government is in the process of launching 'Digital data based credit ratings' of Micro, Small and Medium Enterprises, to help entrepreneurs to get bank loans on the basis of these credit ratings. Firm trade persisted for the most part of the session, amid a report stating that Prime Minister Narendra Modi is finally attempting to overhaul India’s most controversial labour laws to attract investment and make it easier to do business in a country where changing archaic rules is a challenge for any government. In the last hour of the trading day, key indices turned negative, on the back of weak cues from the global markets. Domestic sentiments got hampered after credit rating agency India Ratings and Research (Ind-Ra) revised its GDP growth forecast for the current financial year (FY20) to 5.6 per cent. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1 per cent. Some concerns also came with the Employees State Insurance Corporation’s (ESIC) latest payroll data showing that around 12.23 lakh jobs were created in September 2019, lower than 13.38 lakh in the previous month. Finally, the BSE Sensex lost 67.93 points or 0.17% to 40,821.30, while the CNX Nifty was down by 36.05 points or 0.30% to 12,037.70.