Indian markets in hope of a rate cut gained some momentum in the final hours of last trading session and ended with decent gains. Today, the start of the important day is likely to be soft, tailing the feeble global cues and traders will be eyeing the Reserve Bank of India’s (RBI) first bimonthly monetary policy announcement for the fiscal. RBI is expected to cut its policy interest rate by a quarter percentage point, lowering it to a more than five-year low. The central bank may also announce that it is retaining its 'accommodative' stance, raising the prospect of another 25 bps rate cut later this year. Traders are likely to get some support with statement of Economic Affair Secretary Shaktikanta Das, who expecting an early passage of GST bill by Parliament has said that administrative machinery is ready to implement the new indirect tax regime, which will be a key component in improving ease of doing business. Meanwhile, the government has said that it is keen to sign the free trade pact with the 28-nation bloc at the earliest and will soon approach the authority for a meeting of chief negotiators. There will be some buzz in the PSU stocks, as the Finance Ministry has made a list of 16 PSUs, including ONGC, Oil India and Coal India for achieving its disinvestment target of Rs 40,000 crore in FY17. There will be some buzz in the PSU oil marketing companies, as petrol price has been hiked by Rs 2.19 a litre and diesel by 98 paise per litre.
The US markets made a weaker closing in last session amid mounting speculation the Federal Reserve will raise interest rates before summer. The sentiments were also weighed down by a US Department of Commerce report that factory orders fell 1.7 percent in February. The Asian markets have made a weak start with some of the indices trading lower by over one percent, led by the Japanese market which is down by over two percent, as the oil declined for a third day, while the yen gained.
Back home, hopes of a rate cut in the monetary policy review, coupled with positive macro-economic data and value buying in frontline blue-chip stocks, helped Indian benchmark indices to end the session with the gain of over half a percent on Monday. Sentiments got a boost after a business survey showed India's manufacturing activity expanded to an eight-month high in March driven by strong rise in business orders. The Nikkei-Markit purchasing managers’ index rose to 52.4 in March, up 1.3 percentage points after two months at 51.1 this year. This is a third consecutive monthly improvement in business conditions across the sector. Some support also came with the report that the government achieved the fiscal deficit target for the year, putting an end to speculation after February numbers came in on the high side and reinforcing the commitment to fiscal discipline ahead of the Reserve Bank of India monetary policy review scheduled for April 5. Further, market participants also got some encouragement with India's latest monsoon forecasting model predicting good rainfall this year, which will end severe water shortage that is threatening power supply and could cheer farmers who have been devastated by two consecutive droughts. On the global front, Asian marked ended the session on positive note on Monday, however, European shares declined to near a one-month low in early trade. Back home, after starting the trade on firm note, Indian benchmark indices showed some strength in early trade, but the sentiments turned pessimistic in late morning trades and indices started drifting lower, however the market regained its momentum in the final hour of trade and finished the day gaining around half a percent. Finally, the BSE Sensex gained 130.01 points or 0.51% to 25399.65, while the CNX Nifty rose 45.75 points or 0.59% to 7,758.80.
