Markets to extend jubilation to new week with a positive start

The Indian markets continuing their surge for the second straight day ended higher in last session. Today, the data heavy week is likely to get a positive start on supportive global cues, though traders will be eyeing the Gujarat elections and the macro data of industrial output, consumer inflation and wholesale inflation data slated to be released later this week. Traders will be getting some support with statement of the prime minister’s economic advisory panel member Rathin Roy who has expressed hope that the forthcoming budget will not be a 'populist' and will reflect the commitment of the government to improve quality of expenditure. Meanwhile, industry body Assocham has said that the government needs to accord top priority to agriculture in the budget as a major shortfall in kharif production resulted in sluggish growth of farm sector in the second quarter this fiscal. Traders will also get encouragement with CII’s Business Confidence Index climbing to 59.7 during October-December 2017, against 58.3 in the previous quarter, as reform measures such as the Goods and Services Tax (GST) instilled optimism in India Inc. Also, the Bihar Deputy Chief Minister Sushil Modi has said the Goods and Services Tax (GST) Council would examine the possibility of merging the 12 and 18 percent tax rates to a new slab. He added that more than 90 percent of issues related to tax rates have been resolved after the Council brought down 178 items from higher rates to lower one.

The US markets surged in the last session, lifting the Dow and the S&P 500 to new record closing highs, following the release of a report from the Labor Department showing stronger than expected job growth in the month of November. The Asian markets have made a good start and some of the indices are up by about half a percent after the US government averted a shutdown and tax reform negotiations made progress. Japanese market was leading the gainers as the yen fell to its lowest in a month.

Back home, extending previous session’s northward journey, Indian equity benchmarks displayed spirited performance on Friday, with frontline gauges recapturing their crucial 33,200 (Sensex) and 10,250 (Nifty) levels. The markets' mood remained up-beat throughout the day and benchmarks, after a gap-up opening, fervently gained from strength to strength, as investors continued hunt for fundamentally strong stocks amid firm global cues. Sentiments remained positive since beginning with International Energy Agency's (IEA) report that India is emerging as a 'major driving force' in global energy trends, with all modern fuels and technologies playing a part. Meanwhile, the finance ministry has said that the FRDI Bill, under consideration of a joint parliamentary committee, is depositor friendly and provides more protection to them compared to existing provisions. It has clarified that the provisions in the FRDI Bill do not modify current protections for depositors adversely at all, the ministry held, maintaining that these rather provide additional protections in a more transparent manner. Markets extended rally in later part of the trade with pre-poll surveys showing Bharatiya Janata Party would win the Gujarat elections this month. Heightened uncertainty about the BJP’s prospects in the state elections had weighed on investors’ sentiments in recent days. The survey came as a relief for investors, who want political stability as the government attempts to steer the economy out of the slump. Buying in banking stocks too aided sentiments on report that bank loan growth rate rose to a three-year high in November indicating businesses are ramping up output after the Goods and Services Tax (GST) induced disturbances. Separately, a foreign brokerage report highlighted that the Indian economy is expected to witness cyclical growth recovery, with real GDP growth likely to accelerate from 6.4 percent this year to 7.5 percent in 2018 and further to 7.7 percent in 2019. Finally, the BSE Sensex soared 301.09 points or 0.91% to 33,250.30, while the CNX Nifty was up by 98.95 points or 0.97% to 10,265.65.