Markets to make a somber start on geopolitical worries

The Indian markets before going for a long weekend lost substantial ground, today the start is likely to remain soft-to-cautious with the geopolitical tensions on North Korea that impacted the other Asian markets on Friday, weighing down the domestic market too. Also on  a Reserve Bank of India report that credit growth plunged to a whopping six-decade low of 5.08 percent in the financial year 2016-17, as against 10.7 percent a year ago. Traders will however be getting some support with growth in exports of goods from India reaching its peak in the last month of fiscal 2016-17 with a 27.59 per cent increase, year-on-year, to $29.23 billion in March 2017. After two continuous years of decline, exports in April-March 2016-17 posted an increase of 4.71 per cent to $274.64 billion compared to the previous fiscal. Meanwhile, Moody's Investors Service has said that India’s credit profile would improve if it follows the fiscal discipline path and set up a fiscal council as recommended by the FRBM panel. Traders will be eyeing the wholesale price-based inflation for March to be announced later in the day. Oil marketing companies will be in action as the price of petrol has been hiked by Rs 1.39 per litre and diesel by Rs 1.04 a litre in sync with firming international rates.

The US markets continued their weakness in the last session for the third straight day, following comments by President Donald Trump, who told the Wall Street Journal he thinks the US dollar "is getting too strong." Trump also said he likes a low interest rate policy and noted he has not decided whether to reappoint Federal Reserve Chair Janet Yellen. The Asian markets have made a mixed start with some indices trading lower as geopolitical concerns offset data showing China’s economy accelerated for a second month. The Japanese market was down by around half a percent after yen strengthened at a five-month high amid persistent concern over the situation with North Korea.

Back home, Thursday's trading session turned out to be an abysmal end of the week for the Indian equity markets as they prolonged the somber run for yet another session and deposed over half a percent on disappointing macroeconomic data. Industrial growth contracted unexpectedly in February, while consumer inflation quickened to a five-month high in March, a double setback for the Indian economy as it enters the new financial year. Industrial production shrank 1.2% in February against a 3.3% rise in January, while Consumer inflation accelerated to 3.81% in March largely due to increased fuel prices. The decline in Industrial production was broad-based with manufacturing contracting 2%, mining reporting a 3.3% rise in February and electricity generation stagnant at 0.3%. Besides, a weak trend in other global markets on continued geopolitical tensions and comments by President Donald Trump expressing concern about a strong greenback, also dampened trading sentiment. Adding the woes, the country's second-largest software services company Infosys has posted lower-than-expected January-March earnings. Infosys has reported marginal rise of 0.17% in its consolidated net profit at Rs 3603 crore for the quarter ended March 31, 2017 as compared to Rs 3597 crore for the corresponding quarter in the FY16. Furthermore, the company's revenue outlook and plan to return cash to shareholders fell short of expectations, raising concerns at the start of the earnings-reporting season. The company expects its 2017-18 revenue to grow between 6.1% and 8.1% in dollar terms and 6.5-8.5% in constant currency terms. Finally, the BSE Sensex decreased 182.03 points or 0.61% to 29461.45, while the CNX Nifty was down by 52.65 points or 0.57% to 9,150.80. Indian markets remained closed on Friday.