Markets likely to get positive start; IIP, CPI data eyed

Indian markets ended near intraday high levels on Wednesday mainly on the back of late hour buying led by public sector and information technology stocks. Today, the markets are likely to make optimistic start tracking positive global cues. Market participants will be looking ahead to the industrial production data for the month of October and CPI inflation for November which will be released later in the day. Some support will come as the Union Cabinet approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company. The amendments to the Insolvency and Bankruptcy Code (IBC) are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business. Traders may take note of a US diplomat’s statement that India needs to demonstrate to the international community its willingness to become a part of the global supply chain by taking steps towards resolving larger market access issues. However, there may be some cautiousness amid a report that with pressure on revenue collection, the goods and services tax (GST) rates and slabs may be raised during the GST Council meeting next week. Some concern may also come with report that Standard & Poor Global Ratings has said it will downgrade India's sovereign rating if the country's economic growth does not recover. There will be some buzz in the banking stocks as the Union Cabinet approved a partial credit guarantee scheme for public sector banks (PSBs) to purchase high-rated pooled assets from financially sound NBFCs and housing finance companies. Auto stocks will be in focus with automobile dealers' body Federation of Automobile Dealers Associations’ (FADA) statement that retail sales of passenger vehicles in November increased 1 per cent to 2,57,271 units against the same period last year, driven by festive demand during the month. Meanwhile, Ujjivan Small Finance Bank will make its market debut on December 12 after an overwhelming response for its Rs 750 crore initial public offering (IPO). There is expectation that the stock may debut at 50 per cent premium over the issue price of Rs 37 per share.

The US markets ended higher on Wednesday after the Federal Reserve indicated it will likely not raise rates in 2020, removing the fear among investors that it would repeat a mistake it made last year by tightening monetary policy prematurely and knocking the stock market. Asian markets are trading mostly in green on Thursday following gains on Wall Street.

Back home, last hour buying pushed Indian equity bourses to end near their intraday high points on Wednesday. After a positive start, indices traded in green terrain for the most part of the session, aided with Union Surface Transport Minister Nitin Gadkari’s statement that the government would spend a whopping Rs 5 trillion over the next two years in infrastructure projects to spur the economy and create thousands of jobs. However, volatility hit over the markets in noon deals, as the Asian Development Bank lowered forecast for India to 5.1% for 2019 from its September estimates of 6.5% as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. In late noon deals, markets entered into red terrain, after Minister of State for Finance Anurag Singh Thakur informed that as many as 52,720 Integrated GST refund claims are pending for more than one year. But, bourses bounced back to end higher, taking support with Commerce Minister Piyush Goyal’s statement that the government has carried out a number of reforms in various sectors & it is a continuous process for improvement in the economy. He said some of the reforms were by way of amendments in various acts such as the Finance (Amendment) Bills, the Special Economic Zones (Amendment) Bill, amendments in the Goods and Services Tax Act and the Insolvency and Bankruptcy Code. Finally, the BSE Sensex gained 172.69 points or 0.43% to 40,412.57, while the CNX Nifty was up by 53.35 points or 0.45% to 11,910.15.