Markets to face macro jitters, 12,000 mark key on Nifty

Welcome to December, the last month of this much eventful year 2019. Today morning, Mr. Market would have to deal with a lot of negative headlines. Right after the markets shut its door on Friday, there was a slew of important announcements and data were released on the macro front. To begin with, India’s GDP growth rate, as recorded in the July-September quarter, has declined to 4.5 per cent. The announcement was a grim one as the figures have been grim and we are not at all surprised by it. All trends indicated a further deceleration in India’s growth rate. The GDP was 5 per cent in the earlier quarter. After decelerating further, the country stands at the lowest growth in the last 26 quarters at present. The government has been battling, seeking to revive the animal spirit of the economy, and its primary tool at the moment is spending. But spending also has a limit. As we see in these figures, the fiscal deficit surpassed the annual target within the first seven months of the current financial year. Further, the core sector output for October contracts to 5.8 per cent. Moreover, the Auto sales, which have trickled in, failed to cheer after showing signs of some growth in October due to the festive season offers. In November, the passenger vehicle sales decline in line with the trend in the earlier months of the current financial year.

Meanwhile, the Nifty’s PE ratio is once again above the 28 mark, which is in the bubble zone-historically. Amidst all this, there is some cheerful news as well in the forms of GST collection. The GST collection in the November month has crossed Rs. 1 lakh crores mark. However, this could be short-lived as the uptick in the collection could be mainly attributed to festival cheer. Overall, we are heading for an interesting session and bulls have to face the storms and get past these storms, if they have to march ahead. Meanwhile, the SGX Nifty indicates a modest decline at the start as it is trading down by 12 points at 12,089. Technically, the level of 12,000 mark is crucial for the Nifty.
 
The Asian markets are seen advancing in early deals on Monday despite the negative cues from Wall Street on Friday. Aiding the sentiments of market participants is the data released over the weekend that showed China’s Factory activity unexpectedly returns to growth in November.  Japan’s Nikkei 225 has surged 1.02 per cent, Hong Kong’s Hang Seng has added 0.50 per cent, and China’s Shanghai Composite has moved higher 0.43 per cent.
 
Back home, on Friday, the markets opened the session on a negative note and stayed in a falling trajectory in the first half of the session. However, in the second half of the session, the sell-off was arrested and markets spent the rest of the day moving in a sideways trajectory. The Nifty ended the day with losses of 0.78 per cent and the BSE Sensex lost 0.82 per cent to settle at 40,794. The broader markets outperformed the frontline indices with Nifty Midcap and Smallcap advancing 0.06 and 0.94 per cent, respectively. On the sectoral front, barring Nifty Realty all other indices witnessed selling pressure with Nifty Media and Nifty PSU Bank were top losers.
 
As for global happenings, in a shortened session, the US stock posted modest decline on the final trading session of the week; however, on weekly basis stocks moved higher and posted another solid weekly gain. For the day, the Dow fell 113 points, the NASDAQ slipped 40 points and the S&P 500 dropped 13 points. Meanwhile, major European extended fall for the second straight day on Friday as investors preferred to take profits off the table ahead of the weekend as Hong Kong braces for a fresh round of protests over the weekend.