Markets to get a mildly positive start ahead of WPI numbers

The Indian equity markets ended mixed in last session after the release of dismal industrial output and retail inflation data. Today, the start is likely to be mildly in green tailing positive global cues, though traders will be eyeing Wholesale Price Index (WPI) data to be released later in the day. Traders may get some support with private report stating that India’s GDP growth is expected to be around 7.1 per cent this fiscal following a likely pick up in industrial production as firms resort to restocking post GST especially ahead of festive season. However, traders may remain cautious on report that India has been placed at a low 103 rank, the lowest among BRICS economies, on the WEF’s Global Human Capital Index, which has been topped by Norway. India also ranks among the lowest in the world when it comes to the employment gender gap. There will be some buzz in the chemical and fertilizers stocks, as the government has imposed an antidumping duty of up to $60.35 per tonne for five years on a chemical used in fertiliser industry from four countries -- Russia, Indonesia, Georgia and Iran. The move would help guard domestic players from below- cost imports of ammonium nitrate from these countries. The companies engaged in development of road and infra too will be buzzing on ICRA’s report that Government’s focus on developing roads with policy initiatives like awarding projects after securing 80 per cent right of way, has revived the sector and execution pace.

The US markets ended marginally higher, reaching new record closing highs. The gains remained capped as traders expressed some uncertainty about the near-term outlook for the markets following recent strength. The Asian markets have made an optimistic start taking cues from the US markets which closed marginally in green. However, gains remained capped as investors remained on sidelines ahead of China’s retail sales, industrial production and fixed asset investments numbers.

Back home, Selling in last hour of trade forced markets to end mixed on Wednesday, as traders remained on sidelines ahead of Wholesale Price Index (WPI) data slated to be released tomorrow. Though, markets traded in fine fettle for most part of the day’s trade with traders getting support from report that 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. Markets extended gains to hit intraday high in noon deals with Sensex extending its gains to surpass its crucial 32,300 level with investors taking note of the joint report by ASSOCHAM-EY, which highlighted that if India has to maintain a sustained gross domestic product (GDP) growth of 9-10 per cent per annum, it is crucial that the manufacturing sector grows steadily at 14-15 per cent per annum over the next three decades. However, markets took U-turn from that levels and ended mixed, as traders opted to book profit at higher levels amid report that India Inc’s foreign direct investment (FDI) dropped 14.82 per cent to $1339.26 million during August 2017 from $1572.23 million in the same month of last year. Investors also maintained a cautious approach with the report that the Consumer Price Index (CPI)-based inflation surged to five-month high in August, mainly due to an increase in foods prices and higher services costs, indicating Goods and Services Tax’s (GST’s) inflationary impact. Separately, a private report based on the latest annual earnings, showed that India’s corporate debt rose to a seven-year high at the end of March. More than a fifth of large companies did not earn enough to pay interest on their loans and the pace of new loans fell to the lowest in more than six decades. Finally, the BSE Sensex gained 27.75 points or 0.09% to 32,186.41, however the CNX Nifty was down by 13.75 points or 0.14% to 10,079.30.