Markets to get a positive start on upbeat economic data

The Indian markets came into consolidation mood in last session and snapped their five days gaining streak, traders were a bit cautious ahead of key economic data announcements, while the global cues too remained unsupportive. Today, the start of the new month is likely to be in green and traders will be rejoicing the good GDP numbers. The economy clocked 7.6 per cent growth rate for 2015- 16 fiscal, up from 7.2 per cent a year ago. The full-year growth was fuelled by close to eight per cent growth rate in the fourth quarter of 2015-16. Meanwhile, reacting to the better than expected numbers, Finance Minister Arun Jaitley has said that Indian economy is treading the upward curve in its growth trajectory and investors wanting higher returns should park funds in infrastructure and manufacturing sector. Also, the Finance Ministry pinning hopes of a good monsoon has said that it expects GDP growth rate to notch up to 8 percent in the current financial year. Traders will also be getting support with the India's eight core sectors growth surging by 8.5 percent in April to a four year high, compared to (-)0.2 percent in same month last year. In slew of good economic data, the Centre met the fiscal deficit target of 3.9% of GDP in FY16 on the back of several measures taken by the government. The PSU oil companies will see some action, after increasing prices of petrol by Rs 2.58 per litre and diesel rates by Rs 2.26 per litre in order to align the domestic rates of the automobile fuels with global prices.

The US markets made a mixed closing in last session, as traders seemed somewhat reluctant to make any significant moves ahead of the release of the closely watched monthly jobs report on Friday. Traders largely overlooked the Commerce Department report that personal spending surged up by 1.0 percent in April.  The Asian markets after making mostly a positive start are trading mixed, as crude turned lower, while the Japanese share led the decliners as the yen strengthened.

Back home, it was a lackadaisical performance from the Indian benchmark indices on Tuesday, as they failed to snap the session in the green territory and settled marginally below the neutral line. The frontline gauges took a breather, after showcasing a scintillating performance in last five trading sessions and investors chose to remain on the sidelines ahead of the key gross domestic product (GDP) and fiscal deficit data due later today. India’s GDP growth for the fourth quarter of 2015-16 is likely to be around 7.1 per cent, but slow private sector capital expenditure (capex) spending and stressed banking sector will weigh on the economy's growth potential this year. Depreciation in Indian rupee too weighed down sentiments. Indian rupee erased its initial gains and was trading weak at 67.20 at the time of equity markets closing on account of month-end dollar demand from importers and fresh capital outflows.  However, investors got some comfort after Finance Minister Arun Jaitley promised more structural and market-oriented reforms as well as stepping up infrastructure spending to accelerate economic growth beyond the current 7.6 per cent.  He also promised to reform the tax structure to make it simpler, predictable and stable. Some support also came with the former Singapore Prime Minister Goh Chok Tong’s statement that India is a beacon of hope and has the potential to drive the world economy for the next 10 years, amid concerns of slowing global growth. On the global front, most of the Asian markets ended higher on Tuesday, while European stocks edged lower in early trade. Back home, after getting firm start, the local benchmark indices slipped into negative territory in late morning trade as market participants booked profits at attractive and higher levels. Though the indices didn’t showed any sharp correction and traded in a tight range below neutral line for most part of the session amid lack of key triggers ahead of March quarter GDP numbers and March fiscal deficit data, scheduled for release after the market hours. Finally, the BSE Sensex ended lower by 57.64 points or 0.22% to 26667.96, while the CNX Nifty dropped 18.40 points or 0.22% to 8,160.10.