Benchmarks to make slightly positive start on Tuesday

Indian markets ended a range-bound session marginally higher on Monday supported by buying in blue-chip stocks such as HDFC, Reliance Industries, Maruti Suzuki India, and Axis Bank. Today, the markets are likely to make flat-to-positive start. Some encouragement will come as Chief Economic Advisor KV Subramanian stated that the current slowdown in the Indian economy is more cyclical than structural in nature and the government has a well-thought-out agenda for reforms. He noted that the country's potential growth remains unaltered and things will improve soon. Some support will also come with the Indian envoy to the US’ statement that India took only five years to move from a $2 trillion to $3 trillion economy, and he exuded confidence that the country would touch the $5 trillion mark in the coming years. Traders may take note of Commerce and Railways Minister Piyush Goyal’s statement that after clarity over angel tax, simpler regulations and more funds could be in offing for startups. However, there may be some cautiousness with report that the Central GST collection fell short of the budged estimate by nearly 40 per cent during the April-November period of 2019-20. Traders may react to a private report indicating that India is expected to witness a marginal 7 per cent rise in job creation in the October-March period of this financial year, as subdued economic conditions have dampened employment outlook. There will be some buzz in the telecom stocks with CRISIL Ratings’ report that a tariff uptick of upto 50% in the telcom sector may double the industry's operating revenue by next fiscal. The rating firm concluded that revised tariffs will improve the average revenue per user (ARPU)- a key industry metric and every Rs one increase in ARPU will add to Rs 1000 crore to industry's EBIDTA. Banking stocks will be in focus with Minister of State for Finance Anurag Singh Thakur’s statement that public sector banks (PSBs) returned to profitability in 2019-20, posting an aggregate profit of Rs 3,221 crore in the first half ending September. There will be some reaction in insurance stocks with a report that life insurance companies saw a 37.2 percent Y-o-Y growth in their eight-month (April to November) period new premiums at Rs 1.69 lakh crore compared to a year ago.

The US markets ended in red on Monday as investors kept a close eye on trade negotiations ahead of Sunday’s tariff deadline and policy updates from global central banks. Asian markets are trading mostly lower on Tuesday as investors refrained from making major bets before December 15, when the next round of US tariffs on Chinese imports is due to take effect.

Back home, Indian equity benchmarks ended the volatile day with marginal gains on Monday. After a cautious start, key indices traded volatile, as IHS Markit in its latest report stated that India's real GDP growth in 2019-20 fiscal is expected to be slightly below 5% as the impact of stimulus measures will take time to filter through to the economy. Adding more worries among market participants, Former Reserve Bank of India’s (RBI)  governor Raghuram Rajan said that India is in the midst of a ‘growth recession’ with signs of deep malaise in the Indian economy that is being run through extreme centralisation of power in Prime Minister’s Office and powerless ministers. Despite volatility, markets managed to keep their heads above their neutral lines for the most part of the session, aided by Finance Minister Nirmala Sitharaman’s statement that the government is working on more measures to revive the sagging economy. Traders got some relief, after Chief Economic Adviser KV Subramanian said that private investment is key to economic growth and the recent cut in corporate tax rate was done to boost investments. Further, the street took a note of the RBI’s data report stating that India Inc's foreign borrowings grew over two-fold to $3.41 billion in October over the corresponding month a year ago. Finally, the BSE Sensex gained 42.28 points or 0.10% to 40,487.43, while the CNX Nifty was up by 16 points or 0.13% to 11,937.50.