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Markets to get a cautious but green start

07 Mar 2017 Evaluate

The Indian markets making a strong start of the new week surged in last session to two-year closing high. Today, the start is likely to be cautious but in green, tailing the regional cues. Meanwhile, RBI Deputy Governor Viral V Acharya has said that demonetisation impact on GDP may be seen in the current quarter in some segments, while the remonetisation exercise should be completed in 2-3 months. He further said that the impact of the notes ban would only be temporary and would help in bringing informal sector into the mainstream economy. There will be some buzz in the oil & gas sector with International Energy Agency (IEA) stating that India is moving to the centre stage of global energy market and by the early 2020s it will replace Russia as the world's third largest refiner. Pharma sector too will be in action on report from ICRA that domestic pharmaceutical industry is likely to register moderate growth largely owing to increased regulatory scrutiny as well as consolidation of supply chain in the US market.

The US markets despite recovering from the day’s low ended modestly in red in the last session. Profit taking mainly contributed to the weakness on Wall Street, as some traders cashed in on the recent strength in the markets, although a report showed that new orders for manufactured goods increased in line with expectations in the month of January. The Asian markets have made mostly a green start though there is caution prevailing in the region as investors assessed whether a rally leading up to a near-certain U.S. interest-rate increase has run its course.

Back home, Indian markets have kicked off the week on a confident note, with the NSE index moving close to breaching a key psychological level of 9,000, while Sensex reclaimed 29,000-mark on Monday. Sentiments got a boost with the GST council moving a step closer towards implementing the goods and services tax (GST) from 1 July, approving two crucial supporting legislations of central GST law (CGST) and the integrated GST (IGST) law for this ambitious tax reform. It will again meet on 16 March to clear the state GST law (SGST) and the union territory GST law (UTGST). Once all the bills are passed by the council, the Union government will collectively take the bills to the Union cabinet for its approval. Some support also came with the report that foreign investments in the services sector increased 77.6 percent to $7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business. However, gains remained capped on rising geopolitical tensions in East Asia, as North Korea fired four ballistic missiles early in the day, while a spat between China and South Korea over missile defence deepened. Meanwhile, Information technology (IT) stocks came under pressure on Monday, following the developments on H1-B visa front in the US. The United States announced that from April 3 it would temporarily suspend the ‘premium processing’ of H-1B visas that allowed some companies to jump the queue as part of its efforts to clear the backlog. Finally, the BSE Sensex surged 215.74 points or 0.75% to 29048.19, while the CNX Nifty was up by 65.90 points or 0.74% to 8,963.45.

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