Benchmarks to get slightly positive start on Tuesday

Indian markets ended sharply lower on Monday, in line with global markets as world growth outlook dampened following a surge in coronavirus cases outside China. Today, the markets are likely to get slightly positive start amid sharp fall in crude oil prices overnight. Sentiments will be getting some encouragement with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is space for further rate cuts despite upside risks to the inflation outlook. Some support will also come with chairperson of the National Committee on Financial Inclusion and Literacy at Niti Aayog Bindu Dalmia’s statement that the government’s target of achieving a $5 trillion economy by 2024-25 sounds too idealistic. She added that the target has been so set to raise the bar of India’s economic performance. Though, there may be some cautiousness with mixed cues from Asian peers and sell-off in the US markets overnight. Traders may take note of RBI Governor Shaktikanta Das’ statement that generalised loan waiver is credit negative which undermines the credit culture in the system. He asserted that the relief related to agriculture loans should be a targeted one. Meanwhile, markets regulator SEBI has reviewed the margin framework for cash and derivatives segments, in order to bring more efficiency in the risk management system. Telecom stocks will be in focus amid report that the government has asked telecom companies to submit AGR self-assessment documents that form the basis of their statutory dues calculation. There will be some reaction in power stocks with ratings agency ICRA’s statement that the outbreak of deadly coronavirus poses concern for domestic solar developers and original equipment manufacturers (OEMs) due to disruption in supply chain for key components used for manufacturing solar modules.

The US markets settled lower on Monday, with losses of over 3%, as investors worry that the spread of a viral outbreak that began in China will weaken global economic growth. Asian markets are trading mixed in early deals on Tuesday amid concerns authorities around the world are struggling to keep the coronavirus from spreading.

Back home, Indian equity bourses settled with deep cuts on Monday’s trading session. After a weak start, indices remained under a grip of bears throughout the day, as think tank National Council of Applied Economic Research (NCAER) pegged the India’s economic growth for the current fiscal at 4.9%, a tad down from 5% estimated by the National Statistical Office (NSO). Market participants were seen taking note of the retirement fund body, EPFO’s latest Provisional Estimate of Net Payroll report showing that India created 1008600 new jobs in the month of December 2019 as against revised figure of 1009238 in November 2019. Losses got intensified over the Dalal Street in the last leg of the trade, on the back of weak cues from the global markets. Domestic sentiments remained pessimistic, as Former RBI governor C Rangarajan said the Reserve Bank alone can not contain inflation as supply-side shocks are needed to be managed by the government. The street paid no heed towards the industry body Assocham’s statement that Indian industry and trade, including pharmaceuticals, are ready to manage the evolving coronavirus situation without causing any major impact on the supply chain and no major challenge is foreseen in the near term. Finally, the BSE Sensex slipped 806.89 points or 1.96% to 40,363.23, while the CNX Nifty was down by 251.45 points or 2.08% to 11,829.40.