Benchmarks likely to make slightly negative start

Indian markets managed to close volatile session with minor gains on Thursday, after oscillating in a range, as investors booked some profits amid weekly index options expiry on the NSE. Today, the markets are likely to get flat-to-negative start amid economic growth concerns. Traders will be cautious as United Nations World Economic Situation and Prospects (WESP) 2020 report lowered its GDP growth estimate for India to 5.7 percent in the current fiscal (from 7.6 percent forecast in WESP 2019) and lowered its forecast for the next fiscal to 6.6 percent (from 7.4 percent earlier). However, some support may come later in the day with government think-tank NITI Aayog member Ramesh Chand’s statement that farm sector growth is likely to be higher at 3.1 per cent in the current fiscal compared with 2.9 per cent in 2018-19. Traders may take note of report that the government may increase customs duty on several products like paper, footwear, rubber items and toys in the forthcoming Budget with a view to promote Make in India and boost manufacturing growth. Meanwhile, markets watchdog SEBI has proposed a new set of norms for investment advisers, under which they will have to segregate their advisory and product distribution activities, as part of its effort to strengthen the regulatory framework. There will be some buzz in the banking stocks with the Reserve Bank of India's (RBI) data showing that Banks credit grew by 7.57 per cent to Rs 100.44 lakh crore while deposits rose by 9.77 per cent to Rs 132.10 lakh crore in the fortnight to January 2. Telecom stocks will be in focus today after the Supreme Court rejected the review petitions moved by Bharti Airtel, Vodafone Idea and Tata Teleservices against its October 2019 order on payment of dues linked to adjusted gross revenue (AGR). There will be some reaction in power stocks with ICRA’s report that The government’s new scheme to grant over Rs 1.1 lakh crore to state power distribution companies (discoms) is a positive measure for the power sector, given the availability of grants for infrastructure upgradation and the chance to improve the operational efficiency of the discoms. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets closed higher Thursday as investors shifted to examining corporate earnings for hints about the economy after an initial US-China trade deal was sealed amid upbeat US economic data. Asian markets are trading mostly higher on Friday following overnight gains on Wall Street.

Back home, Indian equity bourses ended flat despite hitting fresh record highs on Thursday’s trading session. The start of the day was firm, aided with NITI Aayog vice chairman Rajiv Kumar’s statement that the government is likely to take more measures to deal with the problem of financial sector. But, in noon deals, key indices turned negative, as India's merchandise exports fell for the fifth straight month. The commerce and industry ministry data showed that exports contracted by 1.8% in December 2019 to $27.36 billion, as processed petroleum exports saw lower receipts and broad-based decline continued to plague all major foreign exchange earning sectors. Despite some volatility, markets managed to come back in green in second half of the session, after the RBI introduced new rules, in a bid to improve user convenience & increase the security of card transactions. The RBI asked the issuers to provide a facility to switch on / off and set / modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions - domestic & international, at PoS / ATMs / online transactions / contactless transactions, etc. Some support also came with a report that the MSME Export Promotion Council is holding the first three-day summit for aspiring entrepreneurs in the North East from Friday to pave the way for development of entrepreneurship & businesses by women & youths of the region. Finally, the BSE Sensex rose 59.83 points or 0.14% to 41,932.56, while the CNX Nifty was up by 12.20 points or 0.10% to 12,355.50.