Markets to get a strong start on firm global cues

The Indian markets showed a choppy trade in the last session and closed marginally in red despite making a good recovery attempt in the final hours. Today, the start of the penultimate session of the F&O series expiry is likely to be on a jubilant note and the markets will be showing good upmove in early deals, on euphoric global cues. There will be buzz in the market, as the government has allowed 100 percent foreign direct investment (FDI) through automatic route in the marketplace format of e-commerce retailing, though FDI has not been permitted in inventory-based model of e-commerce. Meanwhile, Finance Minister Arun Jaitley has said that India’s decision to open various sectors to foreign direct investment (FDI) has helped the country. Traders will also be getting some support with Finance Minister’s statement that he will reach out to the Congress again to persuade it to support the much delayed GST bill in second half of the Budget Session beginning next month. Banking stocks will be in action, as the Reserve Bank of India has tweaked its rule asking banks to use the marginal cost of funds formula to calculate interest rate for loans with fixed tenure of less three years. There will be some buzz in the telecom stocks, as the global rating agency Moody’s Investors Service has said that telecom tower companies in India will post a revenue growth of about 10 percent over the next two years as mobile operators are expanding their 3G and 4G footprint and will seek to lease more tower space.

The US markets made a bounce back as Yellen’s speech to the Economic Club of New York was seen as dovish regarding the outlook for interest rates. Yellen said she considers it appropriate for the Fed to proceed cautiously in adjusting monetary policy given the risks to the economic outlook. The Asian markets have made mostly a strong start with many of the indices trading higher by over a percent on Janet Yellen’s reassertion of the central bank’s gradual approach to raising interest rates.

Back home, after remaining volatile throughout the session, Indian equity benchmarks ended the session on a weak note on Tuesday, as investors turned jittery ahead of the expiry of monthly derivative contracts later this week and a speech from Federal Reserve Chair Janet Yellen later in the day. Yellen's speech comes after a chorus of hawkish comments from other Fed officials unsettled global markets last week, casting doubt about a revival of foreign investments into emerging markets. On the domestic front, sentiments got undermined by the Finance Minister Arun Jaitley’s statement that India needs to further ease its business processes to boost foreign and domestic investments, as he admitted that the country has been impacted by global trade shrinkages. Further, market participants turned cautious with the report that Indian business sentiment fell for the first time in three months in March as companies faced lower demand amid rising input prices adding to expectations of an interest rate cut by the Reserve Bank.  The MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, fell to 62.7 in March from 63.5 in February. However, investors got some comfort with Prime Minister Narendra Modi’s statement that India will live up to the global expectation of being a bright spot for growth with requisite policy as also administrative reforms on a sustained basis. On the global front, Asian markets ended mixed, while European equities climbed higher in early trading. Back home, Indian bourses got off to a somber opening, extending the downtrend for the second straight session as pessimistic sentiments prevailed across Asian markets. After getting weak start, Indian benchmarks showed some strength, but the sentiments turned pessimistic in late morning trades and indices started drifting lower, lacking any significant upside cues. Finally, the BSE Sensex declined by 65.94  points or 0.26% to 24900.46, while the CNX Nifty dropped 18.10 points or 0.24% to 7,597.00.