Markets likely to get cautious start on Friday, macro-economic data eyed

Indian markets snapped a seven-day gaining streak and ended lower Thursday dragged by selling in banking and auto stocks amid negative global cues. Today, the markets are likely to make cautious start tracking mixed cues from global peers. Investors will be eyeing the industrial production and inflation data to be out later in the day. Traders will be concerned as on Thursday, India reported 34,666 fresh Covid-19 cases. Its case tally now stands at 9,796,992. The country's death toll has mounted to 142,222. With 18,68,172 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 866,664, Andhra Pradesh 873,995, Tamil Nadu 795,240, and Kerala 654,000. With 1,575 new cases, Delhi's coronavirus tally has crossed the 600,000 mark. There will be some cautiousness with a private report that India’s retail inflation probably fell in November from October but remained above the Reserve Bank of India’s target, amid high food and petrol prices. Meanwhile, the Securities and Exchange Board of India (Sebi) has barred Hybrid Research Advisory Services and Always Gain Advisory Service from the capital markets for providing unauthorised trading tips to investors. Though, some support may come later in the day as terming India as an attractive destination for investments, Union Minister Nitin Gadkari has urged investors to tap the vast opportunities it offers and get good returns at a time when the whole world is finding an alternative destination for investment in the wake of COVID-19 pandemic. Traders may take note of a private report that the handsome 25 per cent rise in corporate profits in the September quarter amid a sharp contraction in GDP was on the back of wage squeezes, leading to rise in inequalities in India. telecom stocks will be in focus as the Department of Telecommunications (DoT) is considering holding two spectrum auctions in 2021, starting with the sale of 4G airwave licences, which are due to expire next year. There will be some reaction in auto stocks with a private report that German auto suppliers Continental, Bosch and Volkswagen, the world's largest carmaker, have warned about a shortage of semiconductor components needed for automotive production.

The US markets ended mostly lower on Thursday amid Covid-19 relief package optimism and jobless benefits jumping to a near three-month high. Asian markets are trading mixed on Friday as investors kept an eye on negotiations over additional fiscal stimulus in the US.

Back home, Indian equity benchmarks took a breather and ended in negative territory on Thursday, owing to a sell-off in counters such as Ultratech Cement, Mahindra & Mahindra, HDFC Bank, and Indusind Bank. The benchmarks staged a gap down opening, on sell-off in the global peers. Rising coronavirus cases also impacted the sentiments in the markets. Trade sentiment remained cautious with private report stated that the public health crisis due to the COVID-19 pandemic has emerged as the top threat for Indian corporates, while cyber attacks and data frauds loom equally large. Some anxiety also came with former Deputy Governor of RBI Viral Acharya’s statement that revising up inflation bands for the central bank will hurt the poor. He also said India has to devise ways of pushing up growth in a structural manner and not by ‘pump-priming’ measures like easy credit and easy liquidity. However, in the late afternoon session, Indian equities managed to recover from the lowest point of the day, as the Asian Development Bank (ADB) raised the growth forecast for India in the current fiscal year to minus 8 percent from the minus 9 percent projection in September while keeping the outlook for the next fiscal year at 8 percent. At the same time, it said economic activity in developing Asia is forecast to contract by 0.4 percent this year before picking up to 6.8 percent in 2021 as the region moves toward recovery from the effects of the coronavirus disease (COVID-19) pandemic. Some respite also come as the Union Cabinet approved Rs 22,810 crore outlay for a new employment scheme that aims at encouraging businesses to do fresh hiring. Finally, the BSE Sensex fell 143.62 points or 0.31% to 45,959.88, while the CNX Nifty was down by 50.80 points or 0.38% to 13,478.30.