Markets to make a positive but cautious start of the new week

The Indian markets rallied in the last session with benchmarks adding around a percent to reach their fresh record highs. Some upbeat earnings and easing concerns over Fed rate hikes boosted the domestic market sentiments. Today, the start of the new week is likely to be in green but markets may remain cautious with the government slated to unveil GDP figures for the March quarter on Wednesday. Meanwhile, Confederation of All India Traders (CAIT) has said that classification of different items under various tax slabs of GST has created an environment of anxiety and concern among the trading community across the country. Market will be getting some support with the Employees Provident Fund Organisation (EPFO) approving hike in investment limit in exchange traded funds (ETFs) to 15 per cent, from the existing 10 per cent. There will be some buzz in the banking stocks, as the Finance Minister Arun Jaitley has said that poor performance by private investors and banks still remains a challenge for the Indian economy. He also said the banks have to recover their bad loans to boost private investment, as domestic private investment needs to pick up. In the peak earnings season there will be lots of important earnings announcements to keep the markets in action.

The US markets made a mixed closing in the last session after a lackluster trade, despite a report showing that US economy grew by much more than initially estimated in the first quarter. GDP climbed by 1.2 percent compared to the previously reported 0.7 percent increase. The Asian markets have made mostly a positive start, while some of the markets are closed, Japanese and South Korean markets climbed amid low trading volume. Though, there was some cautiousness to as the North Korea fired another missile, which appeared to be a Scud variant.

Back home, Indian benchmark indices showcased yet another courageous performance and went on to outclass indices around the world by vivaciously rallying by around a percentage in the session and settling above the psychological 9,550 (Nifty) and 31,000 (Sensex) levels for the first time ever. Thursday’s optimism got spilled over into the Friday’s session helping the frontline indices in extending the winning momentum for second successive session as higher derivatives rollover led to strong follow-up buying in index heavyweights on the first day of June series. Broader market outperformed benchmark indices with the S&P BSE Midcap and the S&P BSE Smallcap indices gaining over one and half a percent each. Investors continued to build hefty positions across the board as sentiments got a boost after the report that India retained its numero uno position being the world's top most greenfield FDI investment destination for the second consecutive year, attracting $62.3 billion in 2016. FDI by capital investment saw an increase of 2%to $62.3 billion in 809 projects during 2016 in India. The report has pointed that the global investment landscape has changed considerably in the last year as FDI gravitated to locations experiencing the strongest economic growth, while locations in recession or facing high levels of uncertainty saw major declines. Some support also came with private weather forecaster Skymet’s statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. The weather forecasting agency predicted that monsoon will make an onset over Kerala by May 29, with a margin of error of three days. Meanwhile, Airline stocks gained traction on expectations that a slide in oil prices would reduce carriers' fuel cost. Crude oil skidded 5% after OPEC and allied producers announced extended output cuts that disappointed investors. Both Jet Airways and Global Vectra Helicorp jumped over 3%, while InterGlobe Aviation rose over a percent. Finally, the BSE Sensex gained 278.18 points or 0.90% to 31028.21, while the CNX Nifty was up by 85.35 points or 0.90% to 9,595.10.