Benchmarks likely to make weak start on Thursday

Indian markets ended at fresh record highs on Wednesday, tracking gains in index heavyweight HDFC Bank, RIL and ITC amid unabated foreign fund inflows. Today, the markets are likely to make pessimistic start amid weak global cues and economic growth concerns. Traders will be concerned with former Chief Economic Adviser Arvind Subramanian’s statement that India is facing a Great Slowdown with its economy headed for intensive care unit primarily due to a second wave of the twin balance sheet crisis at banks. Also, there will be some cautiousness with repro that most of the states opposed a change in slabs or hike in Goods and Services Tax (GST) during the crucial GST Council meeting on Wednesday arguing an increase in the levies would have adverse implications for the economy facing a slowdown. Besides, the GST Council has fixed a uniform tax rate of 28 per cent on both state and private lottery. Traders may take note of report that some state governments have asked Union Finance Minister Nirmala Sitharaman to raise their permissible fiscal deficit limit, from the current 3 per cent of gross state domestic product (GSDP) to 4 per cent, after adjusting for inflation. However, some respite may come later in the day with industry body Nasscom’s statement that technology startups alone have created 60,000 direct jobs this year and overall the IT sector will be a positive hirer in the current financial year. Meanwhile, amid rising inward shipments of gold, the government has imposed restrictions on import of precious metals. According to a notification issued by the Directorate General of Foreign Trade (DGFT), import of gold in any form has been placed in restricted category from the free category. There will be some buzz in the sugar stocks with industry body ISMA’s statement that India's sugar production stood at 4.58 million tonne till December 15 of the ongoing marketing year, down 35 percent from the year-ago period, owing to a sharp fall in output in Maharashtra and Karnataka. Insurance stocks will be in focus with the Insurance Regulatory and Development Authority of India’s (Irdai) data showing that non-life insurance companies registered a rise of 13.1 per cent in their collective premium in November to Rs 14,590.50 crore.

The US markets closed mostly lower on Wednesday as rancor continued in Washington and shipper FedEx issued a profit warning. Asian markets are trading in red on Thursday following lackluster trade on Wall Street.

Back home, record setting rally continued on the Dalal Street for the second straight day on Wednesday, with Sensex and Nifty ending higher by around half a percent. After a firm start, key indices remained positive during the whole day, as the Department of Revenue is eyeing to collect at least Rs 1.10 lakh crore as monthly Goods and Services Tax (GST) collection for the next four months each. Adding some relief, Defence Minister Rajnath Singh said that India is impacted to some extent by the global economic slowdown but expressed confidence that the country will come out of the difficult situation within a short time. Indices added more gains to their northward rally in second half of the session, aided with Union Minister Nitin Gadkari’s statement that efforts are on to bolster the economy & create five crore jobs. He also said the government is according high priority to the economy but at the same time, security issues are also important & the government cannot work in silos. Investors took note of CII's President Vikram Kirloskar’s statement that the revised corporate tax rates are competitive & its impact will be visible in the next two years. He emphasised that the government listened to the industry word by word on lowering rates. Finally, the BSE Sensex gained 206.40 points or 0.50% to 41,558.57, while the CNX Nifty was up by 56.65 points or 0.47% to 12,221.65.