Markets likely to get flat-to-positive start on Friday

Indian markets snapped the four-day gaining streak and ended lower on Thursday due to the slip in pharma, IT and banking stocks. Today, the markets are likely to get flat-to-positive start amid gains in global peers coupled with hopes of economic revival. Investors will be taking some encouragement with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the Indian economy might end up with a lower contraction in the current fiscal than projected by various organisations and also stressed that the next stimulus should focus on short-gestation infrastructure projects. However, there may be some cautiousness as a private report stated that with no signs of reprieve from the pandemic in near future and economy yet to show major indications of a revival, India's consumer confidence has declined by 0.3 percentage points in October 2020. Traders may be concerned as India on Thursday recorded 54,482 cases, taking its tally to 7,759,640. Death toll rose to 117,336. Meanwhile, capital markets regulator Sebi COVID-19 pandemic, the watchdog, in March, came out with various measures, including revision of market wide position limit, to ensure orderly trading and settlement to contain high market volatility. Housing finance companies stocks will be in focus with a private report that housing sales in the December quarter likely to rise by 35 percent over the previous quarter boosted by festive demand amid reduced cost of acquisition. Besides, the Reserve Bank of India (RBI) has fixed the minimum Net Owned Fund (NOF) size for housing finance companies at Rs 25 crore. The housing finance companies (HFCs) holding a Certificate of Registration (CoR) and having an NOF of less than Rs 25 crore will be required to achieve NOF of Rs 15 crore by March 31, 2022 and Rs 25 crore by March 31, 2023. Pharma stocks will be in limelight with a private report that US regulators have approved the first drug to treat COVID-19: remdesivir, an antiviral medicine given through an IV for patients needing hospitalization. There will be some buzz in the e-commerce stocks with report that a buying spree among consumers during the current festive season has ushered in green shoots of recovery in the retail sector, which was severely affected due to the COVID-19 crisis, while e-commerce companies enjoy a higher pie of sales as people prefer online shopping now. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended in green on Thursday ahead of the US Presidential Debate. Asian markets are trading mostly higher on Friday after positive U.S. economic data and signs of progress in stimulus talks in Washington lifted Wall Street benchmarks.

Back home, snapping four straight days of gains, Indian equity benchmarks settled in the red on Thursday as IT, banking and healthcare stocks declined amid weak cues from global markets. The benchmarks traded in a range-bound with a negative bias for most part of the day, as the International Monetary Fund (IMF) in its report on the Asia-Pacific region has slashed this year's economic forecast for Asia, reflecting a sharper-than-expected contraction in countries like India, a sign the coronavirus pandemic continues to take a heavy toll on the region. While the IMF upgraded next year's growth forecast, it warned the recovery will be sluggish and patchy with countries dependent on tourism seen taking a particularly hard hit. Some anxiety also came with a private report that the government expects the fiscal deficit to be close to 7 percent of GDP or thereabouts in the current financial year. The general deficit is unlikely to be lower than 11 percent, with the state government borrowings estimated at 4 percent levels. However, losses were limited as some support came with Reserve Bank Governor Shaktikanta Das’ statement that the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government. More stimulus hopes also added support to the markets. Some support also came with Economic Affairs Secretary Tarun Bajaj’s statement that the government is open to further stimulus measures to boost the coronavirus-hit economy. Meanwhile, the Reserve Bank announced an on tap Targeted Long-Term Repo Operations (TLTRO) scheme of up to Rs 1 lakh crore to enable banks to provide liquidity support to a host of sectors, including agriculture, retail, drugs and pharmaceuticals and MSMEs. Finally, the BSE Sensex fell 148.82 points or 0.37% to 40,558.49, while the CNX Nifty was down by 41.20 points or 0.35% to 11,896.45.