Markets to continue the momentum with a positive start

The Indian markets rallied in last session with benchmarks hitting new record highs on encouraging exports data and continued strength in rupee. Today, the start is likely to be in green and the markets will continue the momentum amid sanguine regional cues. Also, traders will be getting support with the Goods and Services Tax (GST) Council, finally giving its nod to all the five draft legislations needed for implementation of the unified indirect tax, paving the way for the model laws - central GST (CGST), state GST (SGST), integrated GST (IGST), Union Territory GST (UTGST) and Compensation Act - to be presented in the ongoing Budget session of Parliament after it is approved by the Union Cabinet. Meanwhile, global rating agency Crisil has blamed divergent growth dataprints for WPI-CPI variance. It said the main reason for the faster growth in manufacturing GDP is that growth in the value of inputs used for production has been slower than the value of the final output. The export oriented stocks will keep buzzing, as buoyed by last month's double-digit export growth, the Federation of Indian Export Organisations (FIEO) is looking at more export friendly measures to sustain the growth rate in a challenging global environment.

The US markets ended modestly in red in the last session. The weakness on Wall Street was partly due to profit taking following the strength seen in reaction to yesterday's monetary policy announcement by the Federal Reserve. The Asian markets have made mostly a green start, though the Japanese market was lower by over a quarter percent despite the dollar steadying after two days of decline.

Back home, Thursday turned out to be a fabulous day of trade for Indian equity markets, where frontline gauges garnered a gain of over half a percent as US Federal Reserve Chair Janet Yellen made the well-anticipated move of increased rates by 25 bps in its effort to return monetary policy to a more normal footing. After making a gap-up opening, domestic bourses traded in tight band throughout the day’s trade as traders also took some encouragement with reports of India's exports exhibiting a double digit growth of 17.48 percent, valued at $ 24.5 billion in February compared to $ 20.84 billion during the same month last year on increase in shipments of non-petroleum, non gems and jewellery products. Some support also came with report that the GST Council is likely to endorse supplementary legislations needed for implementation of the goods and service tax (GST) regime. It may also take up capping the cess to be levied on demerit goods like luxury cars and tobacco products for creation of a corpus that will be used for compensating states for any loss of revenue from GST implementation in the first five years. Also, the International Monetary Fund (IMF) enlightened that India’s economic growth is expected to pick up once the effects of cash shortages linked to the currency exchange initiative fade. IMF in its note highlighted that further subsidy reduction and tax reforms, including a robust design and full implementation of the Goods and Services Tax (GST), are necessary to attain medium-term fiscal consolidation plans. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. On the sectoral front, banking shares remained on buyers’ radar as the Finance Minister Arun Jaitley said, the government would consider setting up multiple oversight committees under the Reserve Bank of India (RBI) to examine the cases of non-performing assets (NPAs) referred by banks. Finally, the BSE Sensex surged 187.74 points or 0.64% to 29,585.85, while the CNX Nifty was up by 68.90 points or 0.76% to 9153.70.