Markets to make a green start on positive global cues

The Indian markets after giving up early gains and a volatile day of trade managed a flat closing in last session. Today, the start is likely to be in green and traders will be reacting to report that Prime Minister Narendra Modi has reviewed the progress of the government’s agenda to curb black-money and tax evasion as well as the roll out of the Goods and Services Tax (GST). Also, Finance Minister Arun Jaitley has said the whole debate over the political cost of economic reforms has dissipated with the benefits reaching the deprived sections of society. Meanwhile, global rating agency Fitch Ratings has retained India's 'BBB-' sovereign rating, saying that weak public finances continue to constrain the country's ratings, however it said the outlook on ratings is stable. There will be some cautiousness too with a United Nations (UN) report that India is expected to clock 7.1 percent growth this year before edging up to 7.5 percent in 2018. UN report warned that the country faces heightened risks related to the concentration of bad loans in the public sector banks. There will be some buzz in the infra stocks, as the railway minister Suresh Prabhu has said that India plans to auction one of its largest Public Private Partnership (PPP) projects that entails redeveloping 25 of the country’s most prominent railway stations at a minimum investment of Rs 30,000 crore. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets after a lackluster trade ended marginally in green in the last session, traders were eyeing the crucial meeting outcome of the Federal Reserve, amid signs of softening inflation which eases the pressure to raise interest rates. The Asian markets have made a mixed start, though most of the indices are up following global indexes, as strong earnings and manufacturing data boosted risk appetite, while expectations that the Federal Reserve will signal a June rate increase later in the session lifted the dollar.

Back home, after trading on a feeble note for most part of the session, Indian equity indices managed to negotiate a close in the green terrain, breaking the two-session downtrend, as investors showed renewed buying interests in Realty, Consumer Durables and Oil & Gas counters. Sentiments remained muted with the UN report indicating that India is expected to clock 7.1% growth this year before edging up to 7.5% in 2018, and warned that the country faces heightened risks related to the concentration of bad loans in the public sector banks. Inflation is projected to reach 5.3% to 5.5% in 2017 and 2018. The report also warned that the rise in protectionism put economic growth in Asia Pacific at risk and urged countries in the region to improve governance and fiscal management to bolster development. Further, investors' confidence improved on the report that Factory output increased for the fourth straight month in April 2017. The Nikkei India Manufacturing Purchasing Managers' Index (PMI) - compiled by Nikkei and research firm Markit - remained at 52.5 in April, same as that recorded in March. A reading above 50 on the index denotes expansion, while that less than 50 indicates contraction. Stronger growth in new orders and improving demand conditions were some of the key factors behind the expansion in manufacturing activity in April. Furthermore, some support also came with Prime Minister Narendra Modi's assertion that India was never a more promising investment destination than it is today. He said that today, Indian economy is the fastest growing major economy in the world. In addition to maintaining this pace, our focus is to remove the inefficiencies from the system. Meanwhile, closing the fiscal year on a high, the index of eight core industries rose by 5% in March, a three-month high, led by double-digit growth in steel and coal sectors. The core industries grew by a mere 1% in February this year, and 9.3% in March 2016. Finally, the BSE Sensex gained 2.78 points or 0.01% to 29921.18, while the CNX Nifty was up by 9.75 points or 0.10% to 9,313.80.