Markets to make a positive start; Infosys numbers eyed

The Indian markets despite coming off their highs managed a positive closing in the last session, with traders eyeing earnings season to give further direction. Today, the start is likely to be in green on mostly positive global cues and market will be getting some support from the in line with estimates earnings of number one IT company of the country TCS, which posted 1.3 percent sequential growth in quarterly profit and said it sees improving business environment. Traders will also be getting some support with statement of NITI Aayog Vice Chairman Rajiv Kumar, who dismissing concerns of fiscal slippage has said the next Union Budget will not be a populist one. He said that there shouldn`t be a fear of fiscal risk because of slippage, because if at all, a fiscal slippage happens, it would only be for the right reasons. There will be some buzz in the steel stocks, as the Union Steel Minister Birender Singh has said that exports should account for 6-7 per cent of India’s total steel production in the next few years, up from the 1.5 per cent at present. The IT sector will keep buzzing, as after the inline performance of TCS another IT bellwether Infosys will be announcing its numbers today. Infosys is Infosys is expected to report slightly lower profit for the quarter compared to Rs 3,726 crore in previous quarter, however the revenue of the company are likely to improve marginally. There will be some other important results too, to keep the markets buzzing.

The US markets made a smart bounce back in the last session and the major averages climbed to new record closing highs, on easing concerns about treasuries after China dismissed a report that officials have recommended slowing or halting purchases of US debt. The Asian markets have made a mixed start even though volatility in the Treasuries market subsided and the euro extended its advance. Attention turns to the earnings season and the Japanese shares declined.

Back home, Indian equity benchmarks ended the Thursday’s trade at record closing high levels, with frontline gauges surpassing their crucial 34,500 (Sensex) and 10,650 (Nifty) levels for the first time ever, as investors remained optimistic ahead of key corporate earnings later this week and the federal budget next month. Though, markets made cautious start and traded choppy in first half of the trade, as sentiments remained downbeat with rating agency Care Ratings’ latest report that uptrend in crude oil price is likely to have a major impact on India's fiscal position. Sentiments also remained dampened after a private poll showed that India’s retail inflation likely rose to a 17-month high in December, and that could push the central bank to tighten monetary policy. The December inflation data is due to be released on Friday, January 12. Traders also took note of a report which highlights that the Confederation of All India Traders’ (CAIT) has opposed Centre’s decision to allow 100% FDI in single brand retail via automatic route. CAIT has said that it is serious matter for small businesses and will hamper the welfare, upgradation and modernisation of existing retail trade. Domestic bourses gained momentum in second half of the trade and hit their all time high levels with traders taking some support from global rating agency Moody’s latest report, which has said India and China remain the fastest growth economies in Asia Pacific region. Besides, the cabinet’s decision to allow foreign airlines to invest up to 49% in ailing Air India, and ease foreign direct investment (FDI) policies in some critical areas, including single-brand retail, broking services in construction, pharmaceuticals and power exchanges, too provided some strength to the markets. Market participants also took some encouragement with Credit ratings agency, Crisil Ratings in its latest report stating that India Inc’s top-line (revenue) growth is likely to hit a five-year high of 9% in Q3 (October-December) 2017-18. However, it noted that profits will continue to contract, on the back of rising commodity prices. Finally, the BSE Sensex gained 70.42 points or 0.20% to 34,503.49, while the CNX Nifty was up by 19.00 points or 0.18% to 10,651.20.