The Indian markets despite some late hour recovery ended with modest cuts in last session. Today, the start of the new week is likely to be in green and traders will be reacting to the developments of GST during the weekend. Moving a step closer towards implementing the goods and services tax (GST) from 1 July, the GST council approved two crucial supporting legislations of central GST law (CGST) and the integrated GST (IGST) law, for this ambitious tax reform. It will again meet on 16 March to clear the state GST law (SGST) and the union territory GST law (UTGST). Traders will also be getting some support with the news that foreign investments in the services sector increased 77.6 percent to $ 7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business. There will be some buzz in the IT sector, as the Industry body Nasscom has said that US decision to temporarily suspend the expedited premium processing of H-1B visas will lead to process delays for Indian IT firms too. However, Nasscom feels that the move will not be a 'significant impediment' for the over $110 billion outsourcing industry. There will be some buzz from the primary market too where Music Broadcast, the operator of FM channel Radio City will launch its IPO to raise about Rs 489 crore. The company has fixed the price band of the issues at Rs 324-333 per share.
The US markets made a modestly higher close in last session following a highly anticipated speech from Federal Reserve Chair Janet Yellen, which reinforced expectations that the Fed will raise interest rates at its next meeting later this month. The Asian markets have made a mixed start with some of the indices trading in red, the Japanese and Seoul market were lower as geopolitical risk increased after North Korea fired four ballistic missiles.
Back home, Indian benchmark indices trimmed most of their losses, but failed to end the session on positive note, as traders remained cautious ahead of a speech by U.S. Federal Reserve Chair Janet Yellen, with expectations growing the Fed would raise interest rates soon. Several Fed officials have recently voiced their need for higher rates, which has seen the implied probability of a move this month shoot higher. On the domestic front, sentiments got hit by the GST Council deciding to peg the peak goods and services tax (GST) rate at 40% in the legislation instead of 28%, giving it the flexibility to raise rates without having to reach out to Parliament. Though, the change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 percent agreed upon last year for the moment. However, investors were seen covering lot of short positions in late afternoon trades after some pessimism got petered out on the back of strong services PMI data. India's dominant services industry returned to growth in February for the first time in four months, as demand slowly recovers after the government's cash crackdown late last year. The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction. Some support also came with the report that the Competition Commission of India is assessing regulations across sectors in efforts to weed out ‘obsolete regulatory restrictions’ and improve the ease of doing business. Finally, the BSE Sensex declined 7.34 points or 0.03% to 28832.45, while the CNX Nifty was down by 2.20 points or 0.02% to 8,897.55.