Markets to start on a positive note amid sanguine global cues

The Indian markets managed a flat closing with a positive bias in the last session, though the trade remained choppy and the traders were eyeing the industrial production data and corporate earnings. Today, the start of the new week is likely to be in green on sanguine global cues. However, there will be cautiousness too and traders may react negatively to Industrial production data which contracted by 0.4% in December 2016 from the same period a year ago, due to a sharp decline in production of consumer goods. The cumulative IIP growth for April-December was 0.3% against 3.2% for the same period in 2015. Meanwhile, RBI Governor Urjit Patel has attributed the banks grappling with high bad loans to legacy issues saying they are mostly on account of credit facility provided for long-gestation projects before 2011-12. There will be buzz in the Infra stocks, as the Road Transport, Highway and Shipping Minister Nitin Gadkari has said that the government`s road and highway building programme has enough cash to build the crucial infrastructure. He said as many as 101 projects are ready for take-off and funding the same would not be a problem. There will be lots of earnings announcements to keep the markets buzzing.

The US markets moved higher in last session and the indices registered fresh records and posted a third straight weekly gain. Wall Street remained fairly upbeat on the positive impact of lower taxes and regulatory reforms promised by Trump. The Asian markets have made an all green start tailing the gains in US markets and as recent actions by President Donald Trump helped soothe investor worries about ties between the U.S. and its key Asian trading partners.

Back home, Indian benchmark indices ended the range bound day of trade on a flat note with positive bias as market participants remained cautious ahead of IIP numbers for December, which is scheduled to be released later in the evening today. Sentiments got some support with the report that Government's revenue collection from indirect tax grew by an impressive 23.9% during the April-January period, while that from direct tax rose by 10.79%. Total direct and indirect tax collections at the end of January stood at Rs 12.85 lakh crore, 76% of the Rs 16.99 lakh crore target, according to revised estimate for 2016-17. Besides, better-than-expected earnings by some companies also fuelled the positive sentiment. State Bank of India, the nation’s biggest lender, reported 70.88% jump in its consolidated net profit at Rs 2152.23 crore for the quarter ended December 31, 2016, as compared to Rs 1259.49 crore for the same quarter in the previous year. Also, Edelweiss Financial Services reported 46.87% rise in its consolidated net profit at Rs 155.18 crore for the quarter ended December 31, 2016, as compared to Rs 105.66 crore for the same quarter in the previous year. Meanwhile, Investors around the world turned bullish after US President Donald Trump promised to unveil a major tax announcement to lower the burden on businesses. Some support also came with the Labour Minister Bandaru Dattatreya’s conformation that the government was examining a proposal to let the Employees' Provident Fund Organisation (EPFO) invest 15% of its corpus via exchange-traded funds compared with 10% at present. The issue would be taken up in the next meeting of the Central Board of Trustees (CBT) of the fund. However, gains remained capped as Finance Minister Arun Jaitley warned that economies will become more inefficient and GDP will shrink if protectionist trend emerges in developed economies. On the global front, Asian markets ended mostly in green on Friday, as investors cheered upbeat Chinese trade data and strong gains on Wall Street after US President Donald Trump promised to unveil a major tax announcement to lower the burden on businesses. Back home, finally, the BSE Sensex gained 4.55 points or 0.02% to 28334.25, while the CNX Nifty was up by 15.15 points or 0.17% to 8,793.55.