Benchmarks likely to make flat-to-positive start on Thursday

Indian markets ended Wednesday's choppy session on a flat note as gains in metals and auto stocks were countered by losses in financials. Today, the markets are likely to get flat-to-positive start tracking positive global cues. Traders will be taking encouragement with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the Indian economy is coming out of the pandemic-induced degrowth and GDP growth will enter the positive territory in the fourth quarter of this fiscal. Some support will come as rating agency Moody’s said the earnings of most Indian companies will grow in 2021 as demand starts to recover following a sharp slump, supporting deleveraging. Besides, a private report said that Indian businesses expect a quicker return to pre-COVID levels of profitability than most others, and are positive about international trade despite the ongoing protectionism. However, traders may be concerned with report that on Wednesday, India reported 33,761 fresh Covid-19 cases. Its case tally now stands at 9,533,471. The country's death toll has mounted to 138,657. There may be some cautiousness as Commerce Secretary Anup Wadhawan said the country's exports declined by 17.84 per cent during April-November this fiscal while imports contracted by 33.56 per cent in the same period. He said that the trade deficit has come down. Meanwhile, exporters has suggested to the government a series of steps, including extension of fiscal benefits to SEZ units, presumptive tax for cross-border e-commerce and free trade pacts with countries like the US and UK, to boost domestic manufacturing and outbound shipments. There will be some buzz in sugar industry stocks as industry body ISMA said India's sugar production jumped over two fold at 42.9 lakh tonnes during October-November owing to early start of mills this season. Tech stocks will be in focus after a California federal judge in the US struck down two of Donald Trump administration's recent rules meant to drastically curtail the number of visas issued to skilled foreign workers every year. There will be some reaction in infrastructure industry stocks with Union Minister Nitin Gadkari’s statement that the government has taken multiple steps to attract investments in the infrastructure sector, including revising asset monetisation models and setting up special purpose vehicles for the Rs 1 lakh crore Delhi-Mumbai corridor project.

The US markets ended mostly higher on Wednesday as investors weighed upbeat vaccine developments and a potential coronavirus fiscal package against a bleak private jobs report. Asian markets are trading mostly in green on Thursday as investors await the release of a private survey on China’s services sector activity in November.

Back home, Indian equity benchmarks ended the volatile day of trade on quiet note on Wednesday, as traders remained on sidelines ahead of outcome of Reserve Bank of India’s (RBI) December Policy Meet, schedule to take place from December 02 to December 04. Markets started the session on cautious note as sentiments remained downbeat with ICRA’s latest report where it has said that debt resolution through the insolvency and bankruptcy code (IBC) and the resultant realisation for financial creditors has taken a hit so far this fiscal due to the pandemic that led to suspension of fresh proceedings. Markets extended losses in second half of the day amid reports that COVID-19 has drastically affected the investment climate in all economies of the world, causing a sharp decline in the demand and supply equilibrium everywhere. India has been no exception to this unprecedented economic shock. Yet, investment sentiment in the Indian economy has been buoyed by the frequent and active intervention of the Government of India despite being hit by a world-wide pandemic. However, markets witnessed recovery and markets regained almost all of their lost ground to end flat as traders took some support with report that the Organization for Economic Co-operation and Development (OECD) has raised prospects of India’s economy by pegging contraction at 9.9 per cent, against 10.2 per cent it projected in September. Markets participants also took note of report that the gross Goods and Services Tax (GST) collection for November stood at Rs 1.04 lakh crore, 1.4 percent higher than the sum collected in the same month last year. Some relief also came with report that the Reserve Bank of India monetary policy committee is expected to leave interest rates unchanged when it meets on Friday, after data showing the economy contracting less than expected and persistently high inflation. Finally, the BSE Sensex slipped 37.40 points or 0.08% to 44,618.04, however the CNX Nifty was up by 4.70 points or 0.04% to 13,113.75.