Markets to get a green start on good data and supportive global cues

The Indian markets gained momentum in the last leg of trade along with other global markets in last session, on hopes of OPEC nations reaching a deal. Today, the start of the final month of calendar year is likely to be in green, traders will be reacting to lots of economic data announced after the market hours yesterday. The Indian economy remained the world's fastest growing major economy in the September quarter. GDP data released by the Central Statistics Office (CSO) showed the economy grew an annual 7.3% in the July-September quarter, marginally faster than previous quarter's expansion of 7.1%; though it was lower than the expectation of 7.5%. Chief Economic Adviser Arvind Subramanian has said that GDP growth numbers for the first half of the current fiscal have revealed a good and consistent performance but lot of uncertainty remains on the outlook for the second half. In other positive development, the combined index of eight core industries surged to its six months high at 6.6 percent compared to October 2015, led by steel, cement and petroleum refinery. In other economic development India's fiscal deficit in October stood at 79.3 per cent of budget estimates, against 83.9 per cent in September. There will be some buzz in the PSU oil marketing companies, as they raised the price of petrol by 13 paise a litre and cut the price of diesel by 12 paise a litre. Some buzz can be seen in tourism related stocks, as the Cabinet approved the new liberalised visa policy for foreigners. Auto companies too will be in focus as they will start announcing their monthly sales numbers.

The US markets made a lower closing with traders reacting to news of OPEC’s agreement to cut oil production. They even overlooked ADP report showing stronger than expected private sector job growth in November. The Asian markets have made an all green start, led by the Japanese market that is up by over 2 percent in early oil producers’ deal to cut global oil output fueled gains in energy shares.

Back home, Indian benchmark indices staged an astonishing performance on the last day of the month by vehemently rallying close to a percentage points in the session and re-conquering their psychological levels. While hopes of strong GDP for September quarter helped investors’ sentiment, the side-effects of demonetisation continued to have a bearing on the market. The general expectation is that economic growth accelerated to 7.5% in the September quarter from 7.1% in the June quarter but lower than 7.9% growth posted for the March quarter. Sentiments were buoyant in the second half of trade after OPEC ministers gathering in Vienna expressed renewed optimism about salvaging a deal to cut oil production and prop up global prices. The group needs to resolve differences between its three biggest producers -- Saudi Arabia, Iran and Iraq -- at loggerheads over how to share the burden of a plan to reduce supply for the first time since 2008. Under an Algerian proposal put forward on Tuesday, the 14 members of OPEC would cut production to 32.5 million barrels per day from their October level of 33.6 million. Saudi Energy Minister Khalid al-Falih said on Wednesday that OPEC was close to clinching a deal to limit oil output, adding Riyadh would agree to Iran freezing production at pre-sanctions levels. The comments could be seen as a compromise by Riyadh, which in recent weeks insisted that Iran fully participate in any cut. On the domestic front, Investors’ confidence also remained upbeat with a private report indicating that government is expected to meet its fiscal deficit target of 3 per cent for the next financial year on account of additional revenue from penalty on black money and deposits under the income disclosure. Finally, the BSE Sensex rallied 258.80 points or 0.98% to 26652.81, while the CNX Nifty rose 82.35 points or 1.01% to 8,224.50.