Markets to get a positive start on sanguine global cues

The Indian markets after showing a choppy trade posted gains of over a quarter percent in last session, supported by realty and material stocks. Today, the start is likely to be in green on sanguine global cues. Commerce and Industry Minister Nirmala Sitharaman has said that currency fluctuation has become the new normal and there is a need to focus on other factors like infrastructure and raw material cost to enhance export competitiveness. Banking stocks may continue to remain under pressure, as global ratings agency Fitch in its latest report has said that RBI's updated 'prompt corrective action' (PCA) rules can potentially impact more than half of the NPA-laden state-run banks. It said that more than half of state-owned banks would breach at least one of the new thresholds, mainly owing to high NPLs, based on their latest financial reports. Meanwhile, deputy governor of RBI SS Mundra has said that the Indian government and the Reserve Bank of India had not yet reached an agreement on a new plan to clean up the record troubled debt accumulated at the country’s lenders. There will be some important result announcements to keep the markets in action.

The US markets coming out of their consolidation mood surged in last session, reacting positively to the latest batch of corporate results. Positive sentiment was also generated by comments from Treasury Secretary Steven Mnuchin, who indicated the Trump administration plans to unveil a major tax reform plan 'very soon.'The Asian markets have made a green start and some of the indices are up by 0.50-1.00 percent in early deals on optimism for a U.S. tax overhaul and the yen weakness after Bank of Japan Governor Haruhiko Kuroda said he will keep accommodative policy in place.

Back home, Indian equity markets witnessed a fairly stable day of trade on Thursday as investors picked beaten down counters, including technology stocks that lost ground on disappointing quarterly results from software services exporters Infosys and TCS. Sentiments got some support with the report that a normal monsoon this year should continue to revive rural demand and allow the RBI to cut rates by 25 bps in August. According to the report, rural demand is already reviving and the autumn kharif farm income has jumped by 26 percent last year. However, overall gains remained muted ahead of the first round of the French presidential election over the weekend. Opinion polls suggest that the election will be a close call. Investors also remained nerves with Chief Economic Adviser Arvind Subramanian's statement that India's high economic growth rate last fiscal may not reflect the actual impact of demonetisation particularly on the informal sector and it may take a few months to assess its real fallout. Meanwhile, shares of aviation companies like InterGlobe Aviation, SpiceJet and Jet Airways gained tractions after data showed that air traffic during March quarter was almost 18.6% higher than the corresponding period last year. Sugar stocks surged after the government decided to extend stock limits on sugar traders by another six months till October 2017 to check sweetener prices that are ruling at Rs 42-44 per kg. The move will enable state governments to impose stock limits and licensing requirements in respect of sugar. Furthermore, private sector banks witnessed selling pressure after lower than expected result posted by two leading private banks namely Yes Bank and IndusInd Bank, while good buying was observed in PSU banks after new NPA policy received in-principle nod as Prime Minister's Office, Finance Ministry and RBI have reached a consensus. Finally, the BSE Sensex surged 85.82 points or 0.29% to 29422.39, while the CNX Nifty was up by 32.90 points or 0.36 % to 9,136.40.