Markets to make a green start tailing global peers

The Indian markets suffered sharp profit taking in the last session. The mood remained cautious ahead of the French election results and traders opted to take profit ahead of the big event. Today, the start is likely to be in green tracking the regional peers after Emmanuel Macron's victory in the French presidential election signaled a “new beginning for Europe.” Traders will also be getting some support with Finance Minister Arun Jaitley ruling out any surprises in the tax rates in the Goods and Services Tax (GST) that is proposed to be rolled out on July 1 and also asserting that there will be no cascading in goods and commodities, which can even see tax rates coming down a little. The minister also ruled out the possibility of levying tax on agriculture. Meanwhile, India has urged the Asian Development Bank (ADB) to reduce the time it takes to approve a loan as well as to disburse as the developing countries in the Asian region need to build their infrastructure and increase social sector spending. Also, there will be some cautiousness too, as Vice-Chairman, NITI Aayog Arvind Panagariya has said that only genuine farm income must be exempt from tax. He added that "we are only looking to find ways to stop the camouflaging of the income earned from sources other than agriculture as agricultural income". There will be lots of earnings reaction to keep the markets in action, while there will be some buzz from the primary market too, as state-owned Housing and Urban Development Corporation Ltd (HUDCO) is coming with its Rs. 1,200-crore initial public offer (IPO), through which the government will divest 10 per cent stake in the company.

The US markets moved higher in the last session on getting upbeat jobs data and also as the oil rebounded from its series of fall. The Asian markets have made mostly a positive start following Emmanuel Macron’s victory as France’s next president. The Japanese market has taken the lead coming after a three day holiday, while the Chinese market was still in somber mood.

Back home, a session after showcasing large gains of over half a percent, Indian equity indices faltered and failed to extend the winning momentum on Friday. The benchmark indices suffered hefty bouts of profit booking especially in commodities related counters and got dragged below the psychological 9,300 (Nifty) and 29,900 (Sensex) levels. Besides, a selloff in banking shares after the President Pranab Mukherjee Okayed the ordinance on non-performing assets, concerns over French elections on Sunday and mixed global earnings have also hit the sentiment hard. The ordinance promulgated by the government on bad loans has now empowered the Reserve Bank of India to issue directions to banks for resolution of stressed assets. Market participants remained cautious ahead of the Goods and Services Tax (GST) Council meeting, scheduled on May 18-19, to finalise the rates of different commodities and services. It will also approve rates of remaining items. Investors failed to get any sense of relief 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. Furthermore, Economic Affairs Secretary Shaktikanta Das said Indian economy will grow 8% next fiscal as the full-year impact of the landmark GST will be seen by that time. The GST, dubbed as the biggest tax reform since independence, will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Meanwhile, the gold and jewellery stocks gained traction on report 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. Finally, the BSE Sensex decreased 267.41 points or 0.89% to 29858.80, while the CNX Nifty was down by 74.60 points or 0.80% to 9,285.30.