Markets to start on positive note on supportive global cues

Markets traded choppy throughout the day and ended with cut of around half a percent on Tuesday amid continued fears about the outbreak of the deadly coronavirus in China. Today, the start is likely to be good on positive global cues and traders will be drawing encouragement with report that in order to protect prudent commercial decision of bankers, the government has taken a slew of decisions, including doing away with personal responsibilities of MD and CEO of PSBs for compliance in dealing with large value frauds committed by bank officials. Powers have been delegated by Department of Financial Services (DFS) to the Boards of public sector lenders to put in place a suitable mechanism for ensuring compliance of the various timelines laid down in RBI and CVC circulars. Besides, some support may also come with private reports that government is expected to raise spending on infrastructure and cut some personal tax in its 2020-2021 budget, to spur consumer demand and investment. However, the International Monetary Fund urged policymakers to keep a close eye on financial vulnerabilities such as rising debt levels that could pose medium-term risks to the global economy and said further monetary easing was not the answer. The infrastructure sector stocks will be in action as Union Minister Nitin Gadkari said five banks are willing to provide Rs 2.5 trillion for highway projects, and stressed on the need for insurance of infrastructure projects. There will be some buzz in the agriculture stocks on report that the commerce ministry said India has pitched for elimination of trade-distorting subsidies on agriculture and ensuring differential treatment to developing countries by the WTO members. Also, the insurance stocks will keep buzzing on report that  the insurance regulator has come up with guidelines to protect the interests of group insurance policyholders of merging state-run banks. The regulator said upon the merger of public sector banks (PSBs), group health insurance policies of customers of the merged banks shall continue to be serviced by the insurer till the end of the policy period.

The US markets ended higher on Tuesday as gains in technology and financial sectors helped major indexes recover from their worst selloff in about four months on worries over a coronavirus outbreak and its impact on the global economy.  Asian markets were trading higher in early deals on Wednesday as better-than-expected Apple Inc earnings drove some regional tech gains although broader confidence was capped by worries about the economic impact of China's virus outbreak.

Back home, Indian equity benchmarks traded choppy for most part of the day and witnessed sharp selling activity in final hour of trade which forced to close Tuesday’s session near of the day’s low. Markets made slightly positive start, as the government is planning to raise at least Rs 10,000 crore through the seventh tranche of CPSE ETF which will open for anchor investors on Thursday. Some optimism also came with a private report indicated that Finance Minister Nirmala Sitharaman's first full year Budget is expected to provide short-term stimulants to boost consumer demand, and such measures will get a positive response from markets. However, key indices erased gains and turned choppy in early noon deals with traders turning cautious ahead of the presentation of Union Budget due on Saturday, which may include government measures to revive economic growth that has slipped to a more than six-year low. Markets witnessed sudden selloff in the last leg of trade, as the investors sentiment were weighed by the impact of coronavirus on China’s and the world economy. Some anxiety also came with Nobel laureate and economist Abhijit Banerjee’s statement that the country could be passing through a phase of recession, and there is ‘nothing in the data’ that suggests otherwise. He added that the priority of the government should be on refinancing the banking sector, which is in ‘doldrums’. Meanwhile, Labour Minister Santosh Gangwar has expressed confidence that Occupational, Safety, Health and Working Conditions (OSH) code will get Parliament approval in the Budget session beginning this Friday. Finally, the BSE Sensex slipped 188.26 points or 0.46% to 40,966.86, while the CNX Nifty was down by 63.20 points or 0.52% to 12,055.80.