Benchmarks likely to make positive start on Tuesday

Indian markets trimmed some intra-day losses but ended lower on Monday as US bond yields continued to hover near their 13-month peak coupled with disappointing macro-economic data. Today, the start of session is likely to be positive tracking gains in Asian peers coupled with overnight rally in US markets. Some support will come with the government data showing that the country's exports rose marginally by 0.67 per cent year-on-year to $27.93 billion in February, Growing for the third consecutive month, even as trade deficit widened to $12.62 billion. Imports rose by 6.96 per cent to $40.54 billion in the month. Traders may take note of report that Prime Minister Narendra Modi will interact with chief ministers on the Covid-19 situation and the ongoing vaccination drive on Wednesday as the Centre looks to ramp up the inoculation exercise amid a rise in infection in some states. However, traders may be concerned as India reported 24,366 fresh Covid-19 cases on Monday pushing the overall tally to 11,409,524, according to Worldometer. The death toll from the deadly infection jumped to 158,892. India ranks 11th among worst-hit nations by active cases. Maharashtra reported 15,051 new coronavirus cases on Monday, taking the state's caseload to 23,29,464, while 48 fatalities took the death toll to 52,909. There may be some cautiousness with the government’s statement that Cinema halls, hotels, restaurants and offices except those related to health and essential services in Maharashtra will function at 50 percent capacity till March 31. Oil & gas sector stocks will be in focus as finance minister Nirmala Sitharaman said at present, there is no proposal to bring crude petroleum, petrol, diesel, ATF and natural gas under GST. Banking operations were severely hit in some places like West Bengal as officers and employees of public sector lenders went on a strike to protest against the proposed privatisation of two state-owned banks. There will be some reaction in aviation industry stocks with ICRA’s report that the domestic airport sector is expected to incur a net loss of Rs 5,400 crore, and cash loss of Rs 3,500 crore in FY21, impacted by a 66 per cent year-on-year slip in passenger traffic amid COVID-19 induced travel restrictions. Meanwhile, Kalyan Jewellers India Ltd on Monday raised Rs 352 crore from anchor investors ahead of its initial share-sale, which opens for public subscription on Tuesday. The issue, with a price band of Rs 86-87 a share, will open be open for public subscription during March 16-18.

The US markets ended higher on Monday amid optimism over the economic reopening. Asian markets are trading mostly in green on Tuesday ahead of this week’s US Federal Reserve meeting.

Back home, Indian equity benchmarks ended in the negative territory for the second straight trading session on Monday, dragged by selling in Energy, Finance and Healthcare stocks amid mixed global cues. Key gauges made negative start and stayed in red for whole day, with disappointing macro-economic data. With decline in output of capital goods, manufacturing and mining sectors, industrial production re-entered the negative territory in January. The Index of Industrial Production contracted by 1.6 percent in January 2021 over last year, compared to a rise of 1.6 percent in December. Besides, owing to higher food and fuel prices, the consumer price index (CPI) based retail inflation rose to three-month high of 5.03 per cent in February as compared to 4.06 percent in January, raising fresh concerns about the health of the economy. Some concern also came amid reports that foreign portfolio investors (FPIs) were net sellers to the tune of Rs 7,013 crore so far this month in the Indian markets on profit-booking as jitters in global bond markets spooked investors. As per depositories data, FPIs pulled out Rs 531 crore from equities and Rs 6,482 crore from the debt segment between Mar 1-13. Sentiments remained fragile in late afternoon session, as the Wholesale price-based inflation (WPI) in February rose to its 27-month high to 4.17 percent as against 2.03 percent a month ago in January. This is a 27-month high. However, markets recovered some losses in final hour of trade, as traders found some support with Minister of State for Finance and Corporate Affairs Anurag Thakur’s statement that there are green shoots visible in various sectors of the economy and the country is already looking at a V-shaped recovery. Besides, NITI Aayog CEO Amitabh Kant has said that India's power is truly represented by its sustained economic growth, which is a key to its future and critical for security reasons. He said as a fallout of the COVID-19 pandemic radical reforms were ushered in across a range of sectors and asserted that India has had the sharpest recovery among the major economies. Finally, the BSE Sensex fell 397.00 points or 0.78% to 50,395.08, while the CNX Nifty was down by 101.45 points or 0.67% to 14,929.50.