The Indian markets outperforming all the global markets rallied in the last session, supported by some domestic reform measures by the government. The Banking pack surged to new high after Cabinet approved new non-performing assets (NPA) policy to deal with stressed assets. Today, the start of the day is likely to be a bit soft and cautiousness may creep in tailing the weakness in other global markets, as concerns over Indian stocks' rich valuations have heightened. Markets however, may get some support with Confederation of Indian Industry (CII) President Shobana Kamineni’s statement that India can achieve a gross domestic product (GDP) growth of 10 percent by fiscal year 2019-20 on the back of tremendous opportunities available in the economy. She added that the drivers for this step up in growth would include the benefits from implementation of GST, and greater participation of women in the labour force. Meanwhile, the Asian Development Bank (ADB) has lauded Prime Minister Narendra Modi's effort of integrating indirect taxes through the GST, even as it wants the Indian market to be more "deregulated" and FDI friendly to realise the true potential. The banking stocks will continue to be in action, as the President Pranab Mukherjee is likely to promulgate the ordinance giving greater powers to the Reserve Bank to tackle mounting bad loans. The gold and jewellary stocks too will be reacting to the report from the World Gold Council, which has said that the uptake for gold in India for January-March this year was 124 tonnes, up 15% compared with the overall demand for the same period in 2016. There will be lots of important earnings announcements and reaction based on them to keep the markets buzzing.
The US markets remained in consolidation mood and made another flat closing in the last session. Traders were eyeing the monthly jobs report to be released on Friday for further cues; however the economic reports remained mixed. The Asian markets have made a mixed start, with the Chinese market sliding for the fourth consecutive day, approaching near a level that would wipe out all of this year’s gains.
Back home, a session after displaying a distressing performance, Indian equity indices have managed to pull through a dazzling performance by gaining over half a percent on Thursday, thanks to encouraging corporate earnings and a string of government reforms, including NPA package for banks and national steel policy. The government has approved a new policy that envisages Rs 10 lakh crore investment to create more capacity in the steel sector. The policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and production of 300 million tonnes of the alloy by 2030-31. Investors' sentiments also got boost after the US Federal Reserve kept its policy rate unchanged in its two-day policy review. Some support also came with the report that services sector grew for the third straight month in April 2017, though the pace of growth moderated amid slower rise in new business and employment. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector output on a monthly basis, was down from 51.5 in March to 50.2 in April, indicating challenging market conditions that hampered growth. A reading above 50 on the index denotes expansion, while one below the benchmark indicates contraction. Meanwhile, shares of PSU banks surged after Cabinet approved new non-performing assets (NPA) policy to deal with stressed assets. The framework includes the promulgation of an ordinance to amend the Banking Regulation Act to give more teeth to the Reserve Bank of India (RBI) and its oversight committees to act on behalf of banks while deciding on NPAs. The proposals are now awaiting the President's assent. Moreover, Bank Nifty ended record high, supported by ICICI Bank that rallied over nine percent post earnings. Finally, the BSE Sensex gained 231.41 points or 0.77% to 30126.21, while the CNX Nifty was up by 47.95 points or 0.51% to 9,359.90.
