Markets may begin on a positive but cautious note

In early action, SGX Nifty indicates that the Indian markets may start with a modest uptick. The Nifty is expected to open around 10,833, up by 30 points. However, given the geopolitical tensions and expiry of February series future & options contracts, the markets are more likely to remain on tenterhooks and volatility is likely to be elevated. On the macro front, gaining attention of market participants will be India’s GDP figures for the three-month period of October to December 2018. Additionally, the fiscal deficit and infrastructure output numbers are due today for the month of January. 
  
The stock markets in the Asian region were seen trading mixed on Thursday following the mixed cues overnight from the Wall Street and market participants’ focus were on developments on the US President Donald Trump's second summit with North Korean leader Kim Jon Un.  China’s Shanghai Composite index has added 0.29 per cent and Hong Kong’s stock index Hang Seng has risen 0.49 per cent. while Japan’s Nikkei 225 has edged down by 0.35 per cent. 
  
Back home, markets enjoyed an optimistic start, and as the day progressed, the bulls cruised smoothly. However, uncertainty returned to spook the markets as the geopolitical tensions recurred amid fresh clash between India and Pakistan along the Line of Control. Markets erased all of its gain and turned negative. All told, the Nifty ended down by 0.26 per cent at 10,807 and BSE Sensex lost 0.19 per cent to end at 35,905. The broader markets outperformed the benchmarks, with Nifty Mid-cap and Small-cap ending with gains of 0.40 per cent and 0.20 per cent, respectively. The sectoral indices witnessed a mixed trend as Nifty PSU Bank, Nifty Pharma, Nifty Auto and Nifty Realty ended with moderate gains, while Nifty Media and Nifty Bank ended as top losers. 
  
The US markets ended Wednesday’s session mixed and near the flat line amid a host of data and events for investors to digest. The Congressional testimony came from two fronts. First. the US trade representative Robert Lighthizer testified on the US-China trade negotiations in front of the House's Ways and Means Committee that China needs to go beyond pledging to buy more goods to reach to a long-term trade agreement. Second, the Fed chief completed a second day of testimony on the monetary policy. In the economic news, pending home sales were ahead of expectation and factory orders were below expectation. At the close of trading, Nasdaq inched up 5 points, while the Dow slipped 73 points and the S&P 500 ended down by almost 2 points.   
  
European markets ended in the red on Wednesday amid disappointing data and Brexit uncertainties. The DAX of Germany lost 0.48 per cent and the CAC 40 ended 0.26 per cent down, while the FTSE 100 of the UK shed 0.61 per cent.