Markets to extend the gains with a positive start

The Indian markets recovered in the final hours to post decent gains in last session. Today, the start is likely to be in green on sanguine global cues. Traders will also be getting some support with the Reserve Bank of India in its latest report stating that the near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 percent in 2016-17. It has said that a better than anticipated agricultural performance and the possibility of allowances under the 7th Pay Commission's award being paid out in the fourth quarter of 2016-17 provide upsides to this projection. However, pouring cold water on hopes of rate cuts it has said that inflation was running at the upper end of its forecast and that further rate cuts could happen only if inflation falls in the near future. Meanwhile, Niti Aayog Vice-Chairman Arvind Panagariya has said that India's economy will accelerate to 8 per cent growth in the current financial year thanks to a good monsoon, policy reforms and PM Narendra Modi's focus on implementation at the grassroots level. There will be some buzz in the markets with industry and trade representatives set to impress upon the empowered committee of State Finance Ministers about the need to keep the Goods and Services Tax rate at reasonable levels, if not 18 per cent, at a day-long interaction with the committee. Telecom stocks too will be in action, as heeding to the telecom industry's demand for starting spectrum auction from an auspicious date; the government has deferred the mega sale of mobile frequencies by two days to October 1 from the earlier scheduled date of 29th September.

The US markets bounced back and ended higher in the last session, following the release of a report from the Commerce Department showing that income and spending rose in line with estimates in the month of July. The Asian markets have made an all green start with some indices surging by over half a percent in early deals, tailing the overnight gains in US markets. Some recovery in crude prices has strengthened energy stocks in the region.

Back home, Indian benchmarks showcased an enthusiastic performance in final hours on Monday, by surging around half a percent. After making a cautious start markets traded near neutral lines for most part of the day’s trade, but buying activity which took place during last leg of trade helped the frontline indices not only end the session near intraday high levels but also recapture their crucial 8,600 (Nifty) and 27,900 (Sensex) bastions, as investors took to hefty across the board buying. Initially, traders remained cautious after the US Federal Reserve, post its meeting over the weekend indicated increase in interest rate hike during the current calendar year. Depreciation in Indian rupee too dampened sentiments. However, sentiments turned up-beat after federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly report on, manufacturing outlook for the second quarter stated that India's manufacturing sector may witness higher growth during the July-September quarter due to improvement in export prospects and domestic demand. Traders also took some encouragement with reports that in order to ensure that GST is rolled out by April 1, 2017, the government is trying hard to get the winter session of Parliament advanced by a fortnight to pass the bill. Winter Session of Parliament is normally convened in the third or fourth week of November. On the global front, European markets were trading in red terrain in early deals, while most of the Asian equity benchmarks tumbled on Monday. Back home, markets extended the rally in final hour of trade with the Economic Affairs Secretary Shaktikanta Das’s statement that India is expected to clock a GDP growth of nearly 8 percent this fiscal on the back of good monsoon rains. He said that Agriculture production is expected to be much better than previous two years and definitely agriculture will contribute significantly to the GDP. Finally, the BSE Sensex surged 120.41 points or 0.43% to 27,902.66, while the CNX Nifty gained 34.90 points or 0.41% to 8,607.45.