Markets to extend gains with a positive start

The Indian markets despite some volatility ended with gain of a quarter percent in the last session.Today the start is likely to be in green on sanguine global cues and the markets will extend their momentum. Traders will be eyeing the first meeting of the recently constituted Economic Advisory Council to the Prime Minister (EAC-PM), to deliberate upon and lay out a roadmap to give a leg up to the Indian economy in the short term. There will be some encouragement with OPEC’s statement that India is experiencing some of the greatest structural changes as bold new reforms like note ban and GST have put the country firmly on a sustainable growth path. However, there will be some concern too with the International Monetary Fund (IMF) paring India's growth forecast for FY18, citing the lingering impact of demonetisation and disruption caused by the goods and services tax (GST), though it expects a revival as structural reforms bear fruit. Also, credit rating agency India Ratings sees muted private capex conditions to continue for two more financial years on account of weak consumption demand, global overcapacity and negative impact of Goods and Services Tax on working capital. There will be some buzz in agri related stocks, as the Union Minister for Water Resources Nitin Gadkari has said that the Centre plans to launch 285 irrigation projects covering a total of 1.88 crore hectares of farmland by next year.

The US markets despite choppy trade managed a modestly positive close in last session and with the gains on the day, the Dow and the Nasdaq ended the session at new record closing highs. However, a lack of major U.S. economic news led traders to be reluctant to make more significant moves. The Asian markets have made a green start and taking cues from the US markets, though all eyes are on minutes from latest Federal Reserve meeting due today.

Back home, Indian equity benchmarks managed to garner marginal gains and ended the Tuesday’s trade in green terrain, with frontline gauges settling above their crucial 10,000 (Nifty) and 31,900 (Sensex) levels, as investors went for value buying in the blue-chip stocks ahead of the festival season. Market participants also remained optimistic on second-quarter earnings starting with TCS on October 12 and Reliance Industries on October 13. After making a positive start, markets traded in a particular range throughout the session to end with modest gains, as sentiments remained upbeat with RBI Governor Urjit Patel’s statement that the economy is recovering, after growth slowed to a three-year low of 5.7 percent in the April-June quarter. He added that the GDP growth will pick up in the third and fourth quarters (of the current fiscal year) to above 7 per cent. Traders also took encouragement with Finance Minister Arun Jaitley’s statement that India can become a much cleaner and bigger economy among the emerging economies as it has the capacity to implement bold decisions and scale them up efficiently. However, gains remained capped with the Reserve Bank of India (RBI) releasing data that indicates pessimism reigns among consumers and there is less hope for improvement in general economic conditions compared to last year. The RBI’s results of the September 2017 round of the Consumer Confidence Survey, reflecting households’ perceptions and expectations on the general economic situation, the employment scenario, the overall price situation and their own income and spending, showed the Current Situation Index waned further into the pessimistic zone. Finally, the BSE Sensex gained 77.52 points or 0.24% to 31,924.41, while the CNX Nifty was up by 28.20 points or 0.28% to 10,016.95.