Markets to make a positive start of the crucial week

The Indian markets showing a steady trade ended higher in the last session, tracking upbeat global market. Today, the start of the crucial week is likely to be in green and traders will be getting some support with a World Bank report that successful demonetisation will help in raising revenues on sustained basis as more and more people will come under the tax net. Though, the traders will be cautious ahead of the Reserve Bank of India’s monetary policy committee (MPC) meeting, whose outcome will be known on Wednesday. Also, there will be some concern with terror attack in London. Meanwhile, an Assocham-Thought Arbitrage Research Institute Paper has said that sectors such as construction and real estate, beauty and wellness, organised retail, transport and logistics hold the maximum job potential in India in the near future. There will be some action in the gold and jewellary stocks, as following the 15th meeting of the GST Council meeting, GST rates for a number of commonly-used items, including footwear, apparels and gold were announced. Gold, gold jewellery, silver and diamond will be taxed at 3 percent. Gold currently attracts 1 percent excise duty and 1 percent VAT (more for some states), equaling to 2 percent. There will be some buzz in the IT sector too, as the Union IT minister Ravi Shankar Prasad dismissing as 'completely wrong' the reports of a downturn in the Indian IT sector has said a good number of people will get jobs in the current fiscal. The IT minister said firms like TCS and Infosys have said they would recruit thousands of professionals in the current fiscal.

The US markets extended their gains in last session, overlooking a weaker than expected jobs data, as the World Bank forecasted a modest pickup in growth despite uncertainty about monetary policy and concern among bond traders that inflation is waning. The Asian markets have made a mixed start, with some indices trading in red, as the most recent US data is testing bets on improving global growth that has helped drive the value of equities worldwide.

Back home, Indian benchmark equity indices staged a wonderful performance on the last day of the week by gaining close to half percent in the session and conquering their psychological levels. The indices ended at record highs on Friday, tracking upbeat trend in global markets, while hopes of good southwest monsoon rains also lifted sentiment. Market participants took some encouragement with the Moody's Investors Service stating that India's key reforms, including the impending goods and services tax and resolution of sticky loans may improve the country's credit profile.  Some support also came with NITI Aayog Vice Chairman Arvind Panagariya's statement that India will regain the crown of the fastest growing major economy, overtaking China, as early as the first quarter of 2017-18. He said that India, on an annual basis, is ahead of China and will regain the growth momentum soon on the back of host of reforms initiated by the Modi government in the last three years.  Besides, the appreciation in rupee value against the dollar added to the optimistic sentiments. Rising for the third straight day, Indian rupee strengthened by 14 paise to 64.34 against the US dollar in early trade on sustained selling of the American currency by banks and exporters. However, broader gains were capped due to caution ahead of the Reserve Bank of India's policy meeting next week. The central bank is expected to keep rates on hold on June 7, though it could soften its hawkish tone after data showed easing inflation. On the global front, Asian equity markets ended higher on Friday, as a set of upbeat economic data from the US and Europe helped investors shrug off US President Donald Trump's decision to withdraw from the Paris climate agreement. US factory activity ticked up in May after slowing for two straight months and private employers stepped up hiring, suggesting the economy is regaining speed after struggling at the start of the year. While Chinese stocks ended little changed as investors fretted over tighter liquidity and slowing economic growth, Japan's Nikkei share average broke through the 20,000-point barrier for the first time since December 2015. Meanwhile, all the major European counterparts were trading in the green where major indices like CAC and DAX were trading with a gain of over half a percent at this point of time. Finally, the BSE Sensex gained 135.70 points or 0.44% to 31273.29, while the CNX Nifty was up by 37.40 points or 0.39% to 9,653.50.