Markets to make a cautious start ahead of the GDP data

The Indian markets extended their rally in last session, with major averages surging by over a percent. Today, the start of the new week is likely to be cautious as the global markets are not very optimistic after the disappointing US jobs data. However, all eyes will be on GDP Data slated to be announced later in the day and general expectations are that India will remain one of the fastest growing economies in the world, with GDP annual growth at 7.3 per cent in the quarter through December. Traders may get some support with IMF chief Christine Lagarde stating that she hoped Indian Government would be able to implement a series of 'critically important' economic reforms including GST for unleashing the country's growth potential. Meanwhile, Finance Minister Arun Jaitley has said that the Centre and states need to work together to put the country on a high growth path even as states pitched for higher allocation to meet additional outgo towards pay revision of their employees. There will be buzz in the infra stocks, as the government has cleared highways projects for 9 states worth about Rs 17,000 crore to be awarded before March. Steel stocks too will remain in action, after the government set a minimum import price for steel products to check dumping from countries such as China and South Korea. There will be lots of result announcements too, too keep the markets buzzing.

The US markets ended lower in last session following the release of a Labor Department showing disappointing job growth in January but also a drop in the unemployment rate to a nearly eight-year low. Some of the trading Asian markets have made a cautious start and the Japanese market was trading marginally in red though the country posted an 18th consecutive current account surplus as cheap energy imports continue to aid an economy that’s struggling to produce sustained growth and inflation.

Back home, Indian benchmark equity indices staged a blockbuster performance on the last day of the week by vehemently rallying over a percent in the session and re-conquering their psychological levels. Thursday’s optimism got spilled over into the Friday’s session helping the frontline indices in extending the winning momentum for second successive session, as encouraging global developments buttressed domestic sentiments. Investors continued to build hefty positions across the board as sentiments got a boost with reports that foreign direct investment (FDI) in the country doubled to about $ 4.5 billion in December 2015. Some support also came with the report that India is expected to grow by 7.6 per cent in the October-December quarter of the current fiscal -- the fastest pace of expansion in five quarters. According to the report, domestic demand witnessed during the festival season is expected to support growth in the third quarter, even as global headwinds have had an adverse impact on manufacturing and exports. Furthermore, Chief Economic Advisor Arvind Subramanian gave one more candle to investors by saying slump in oil, steel and cement prices presents India with an opportunity to build infrastructure at lower costs as well as shore up public and private spending. However, there was some cautiousness too with a survey conducted by the Reserve Bank of India stating that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017. On the global front, Asian markets ended mostly higher on Friday, while European markets were little changed in early trade. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from global markets. The frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades. Thereafter, the indices kept oscillating in a narrow range through the day’s trade. Finally, the BSE Sensex surged 278.54 points or 1.14% to 24616.97, while the CNX Nifty ended up by 85.10 points or 1.15% to 7,489.10.