Markets may extend gains with a mildly positive start

The Indian markets showed choppy trade after the big rally of budget day but managed to post gains of over a quarter percent in last session. Today, the start is likely to remain in green and the markets will be extending the gains. Traders will be getting some support with the American industry bodies lauding the Budget, saying Finance Minister Arun Jaitley has done an 'admirable job' in creating a vision that will propel the domestic economy while remaining cognizant about foreign investors eying the Indian market.  Also, the Economic Affairs Secretary Shaktikanta Das has said that the government is committed to fiscal prudence. So giveaways bordering on populism are something which the government does not believe in. Instead of giving out doles, the government believes in spending that money in productive sectors like infrastructure, consisting of the railways, the roads or irrigation. There will be buzz from the primary markets too where the BSE will be making its debut on NSE after its initial public offering of Rs 1,243 crore was subscribed some 51 times. There will be lots of important earnings announcements to keep the markets buzzing.

The US markets made a flat closing in last session after showing a choppy trade amid uncertainty about monthly jobs report as well as the impact of President Donald Trump's policies. Traders largely overlooked the better first-time claims for U.S. unemployment benefits. The Asian markets have made a mixed start with Chinese market declining after resuming the trade from the long Lunar New Year holidays. China raised the interest rates in open-market operations.

Back home, a session after showcasing a vivacious rally and amassing close to two percent, Indian benchmark indices consolidated on Thursday and ended the day with modest gains. The session was characterized by extreme volatility as the frontline indices went through a rollercoaster ride amid lack of direction and a pandemonium around global equity markets. Sentiments got some support from Niti Aayog vice-chairman Arvind Panagariya’s expectation that the India’s economic growth in the next fiscal year would be in the range of 7-7.5%. Furthermore, a private report also highlighting that India is expected to clock a GDP growth of 7.1% in 2017-18, up from 6.3% in 2016-17, as the country gets sufficiently remonetised and the schemes in the Budget play a supportive role. The uptick in the growth numbers would be largely driven by the remonetisation process which is expected by April end, as this in turn would boost the consumption levels in the country. Meanwhile, S&P Global Ratings said that Union Budget 2017-18 shows India’s commitment to improve fiscal performance but heavy debt burden and weak public finances remain key rating constraints. Finance Minister Arun Jaitley has pegged the fiscal deficit for 2017-18 at 3.2%, down from 3.5% expected in the current financial year. On the global front, Asian equity markets ended mostly lower on Thursday, as the Fed reiterated its intention to lift rates gradually as the labour market tightens, acknowledging rising confidence among U.S. consumers and businesses. . On the BSE sectoral space, IT stocks recovered in today’s trade, up 1.7% (IT index) after falling as much as 4% in the previous two sessions on visa concerns. Furthermore, oil & gas stocks extended their yesterday’s gains as finance minister Arun Jaitley announced to create an integrated public sector oil major after merging the oil sector PSUs across the value chain in order to enhance their capacity to bear higher risks. The move will be positive for all public oil marketing companies (OMCs) and upstream companies. However, Auto stocks dropped after reporting lower January sales, with the BSE Auto index falling over 1%. Finally, the BSE Sensex gained 84.97 points or 0.30% to 28226.61, while the CNX Nifty was up by 17.85 points or 0.20% to 8,734.25.