The Indian markets rallied in last session supported by global cues and ahead of the key macro data. Today, the start is likely to be in green tailing positive global cues, though traders will be reacting to mixed macro data, while Index of Industrial Production (IIP) or factory output for the month of July 2017 stood at 1.2% compared to negative 0.1% in June 2017 and 5.2% in the similar month of the previous year, the retail inflation or Consumer Price Index (CPI) grew 3.36% in August 2017 as against 2.36% in July 2017 and 5.05% in the corresponding month of the previous year. Meanwhile, an Assocham-EY study has said that the government needs to focus on ways to push the growth of manufacturing sector if it wants to maintain a sustained GDP growth of 9-10 per cent per year. The report said that although implementation of the Goods and Services Tax (GST) has addressed several regulatory issues, state governments need to resolve issues like bureaucratic obstacles, obstructive regulations and policies to boost manufacturing sector. There will be some buzz in the telecom stocks, as the Telecom Commission (TC) has asked the inter-ministerial panel looking into the health of the telecom sector to consider ways for giving greater and immediate relief to telcos, which are facing high debt levels and falling revenue.
The US markets extended their gains in the last session, led by financials on tax reform hopes and tech stocks after Apple's highly-anticipated product launches. The Asian markets taking cues from the US markets have extended gains on bets economic growth is strong enough to withstand heightened geopolitical tensions, though North Korea said it will accelerate its plans to acquire a nuclear weapon that can strike the U.S. homeland.
Back home, bulls tightened their grip on Dalal Street with Sensex recapturing its crucial 32,100 level, while Nifty ending just shy of 10,100 mark, ahead of the macro data of industrial production for July scheduled to be announced later in the day. In the extremely buoyant session of trade, benchmark equity indices after getting positive start, went on steadily gaining ground and halted only at day’s high by close of trade. Sentiments remained up-beat since morning with report that direct tax collections in the first five months of the current fiscal grew 17.5% to Rs 2.24 lakh crore, mainly on account of income tax mop-up from individuals. This is 22.9% of the total budget estimates of direct taxes, which comprise personal income and corporate tax, for the current financial year. There was additional encouragement with the reports that government was expecting a double-digit improvement in India’s rank in the global index on ease of doing business, likely to be announced by the World Bank next month, based on the feedback shared by the multinational organization. Some support also came with Former Reserve Bank of India’s (RBI) governor Raghuram Rajan’s statement that reviving stalled projects and a thrust on infrastructure will be the key to India reaching the 8% economic growth in the short-term. He added that India should focus on removing the bottlenecks on all stalled projects in order to achieve 8-9% growth. Adding to the optimism, global rating agency ARC Ratings, in its latest report has affirmed the ‘BBB+’ rating to the India and maintained a stable outlook on expectation of a strong economic growth. The rating agency also affirmed its ‘A-’ foreign currency and ‘A’ local currency country ceilings for the country. It has said that a solid outlook for economic dynamism continues to drive the sovereign ratings and added that India continues to enjoy solid economic performance and a strong medium term growth outlook, with real GDP growing 7.1% in FY2017. Finally, the BSE Sensex soared 276.50 points or 0.87% to 32,158.66, while the CNX Nifty was up by 87.00 points or 0.87% to 10,093.05.
