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Benchmarks likely to make flat-to-positive start

Indian markets ended in red for the third consecutive day on Tuesday as bond yields rise and inflation worries emerge. Today, the benchmarks are likely to make flat-to-positive start amid mixed global cues. Investors are likely to track Prime Minister Narendra Modi's meeting with chief ministers, scheduled later today, to discuss the situation of coronavirus cases. Traders will be taking encouragement with the commerce ministry's preliminary data stating that India's exports grew 17.27 per cent to $14.22 billion during March 1-14 as compared to the year-ago period, showing healthy signs of revival. The key sectors which recorded a healthy growth in exports include engineering, rice, gems and jewellery. Traders may take note of report that Prime Minister Narendra Modi and his Finnish counterpart Sanna Marin have announced a digital partnership in information and communications technology, future mobile technologies and digital education at a virtual summit. However, there may be some cautiousness as India reported 28,869 fresh Covid-19 cases on Tuesday pushing the overall tally to 11,438,464, according to Worldometer. The death toll from the deadly infection jumped to 159,079. Maharashtra reported 17,864 new coronavirus cases on Tuesday, which is an increase of over 2,000 cases recorded on Monday when the state reported 15,051 new cases. Meanwhile, SEBI has issued guidel­ines aimed at addressing grie­vances of IPO investors, parti­cularly those using the unified payment interface (UPI) for payments. Banking stocks will be in focus as Finance Minister Nirmala Sitharaman said the interest of all employees of state-owned banks which are likely to be privatised will be protected, even as bank unions observed a two-day strike against the government's privatisation decision. There will be some reaction in metal stocks as ratings agency India Ratings and Research (Ind-Ra) revised its outlook on the domestic steel sector from negative to stable for the fiscal year beginning April 1, 2021. The agency also expects the prices of iron ore, a raw material used for steel making, to increase in the coming financial year. Meanwhile, IPO of Nazara Technologies and Suryoday Small Finance Bank will open today.

The US markets ended mostly lower on Tuesday as yields on longer-maturity US Treasury bonds fluctuated. Asian markets are trading mixed on Wednesday as investors await Fed outcome.

Back home, Indian equity benchmarks gave up early gains to end marginally lower on Tuesday, as investors fretted over rising cases of Covid-19 cases in the country and amid new localised restrictions.  Key indices made positive start, as traders found some support 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. Domestic sentiments were optimistic, as the finance ministry said it has released the full Rs 1.10 lakh crore estimated GST compensation shortfall to the states with the release of final weekly installment of Rs 4,104 crore. With the release of the 20th installment, 100 per cent of the total estimated GST compensation shortfall of Rs 1.10 lakh crore for the year 2020-21 has now been released to the states and UTs with Legislative Assembly. However, domestic equities gave up initial gains and traded flat towards the final hours of the day, as traders turned cautious with Credit rating agency ICRA’s report stated that the states may face a shortfall of Rs 2.7-3 lakh crore as Goods and Services Tax (GST) compensation from the Centre next fiscal. Out of that amount, the shortfall from cess collections will be at Rs 1.6-2 lakh crore. Some concern also came 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. Besides, a report stated 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. Finally, the BSE Sensex fell 31.12 points or 0.06% to 50,363.96, while the CNX Nifty was down by 19.05 points or 0.13% to 14,910.45.  

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