Markets to make firm start ahead of Budget session

Indian shares snapped six day winning streak to end marginally in red, as traders remained on sidelines ahead of Union Budget 2018-19, to be announced on February 1, 2018. Today, the start of the day is likely to be in green on positive global cues. Traders will be eyeing the Budget session of the Parliament begins today. As many as 28 bills will be tabled in the Lok Sabha, while 39 bills are listed for the Rajya Sabha for the upcoming session. Market participants will also be eyeing the Economic Survey of India to be presented to Parliament on January 29. Ahead of the Union Budget, the finance ministry every year presents the economic survey, which reviews the overall state of the economy in the last 12 months. Meanwhile, India’s government may look to raise as much as a record Rs 1 trillion ($15.7 billion) from the sale of State assets in the next fiscal year to help meet tough fiscal deficit limits while giving it room to boost spending and woo voters before general elections that must be called by early 2019. However, some cautiousness may crept in with a private report stating that India’s factory output growth in December 2017 is projected to come down to 5.5-6 per cent, from a 17-month high of 8.4 per cent in November last year. There will be lots of important earnings announcements to keep the market buzzing for the day.

The US markets showed a significant move to the upside during trading on Friday. With the rally on the day, all three of the major averages reached new record closing highs, as traders remained optimistic to the better than expected earnings of Intel (INTC). Asian markets were trading jubilantly in early deals on Monday following significant gains stateside in the last session, which saw major US indexes touch record highs.

Back home, snapping six day winning streak, Indian equity benchmarks ended the January F&O expiry session on pessimistic note with marginal cut on Thursday, as traders opted to remain on sidelines ahead of Union Budget 2018-19, to be announced on February 1, 2018. Markets made cautious start to the day as traders shrugged off private report which enlightened that waning effects from the Goods and Services Tax (GST) impact will help push the Indian GDP growth to 7% in FY19. The report added that the growth has slid from previous year’s 7.1% to 6.5% in FY18 due to the implementation of the GST. But as some of the short-run disruptions caused by GST got ironed out, the firm expects growth to rise in the next couple of years. Traders also paid no heed to report that the Department of Industrial Policy and Promotion (DIPP) notified easing of Foreign Direct Investment (FDI) rules for several sectors, including single brand retail, non-banking financial companies and construction. On January 10, in big bang reforms ahead of the BJP government’s last full Budget, the Union Cabinet had allowed 100% FDI in single brand retail and construction development under the automatic route. Investors took note that a day after PM spoke about Climate Change at Davos, a biennial report by Yale and Columbia Universities has ranked India among the bottom five countries on the Environmental Performance Index 2018, plummeting 36 points from 141 in 2016. The street took note that petrol and diesel prices have touched new highs in Delhi NCR and other metros on Wednesday. Petrol was sold at Rs 72.43 per litre in Delhi, the highest in three years. In Kolkata, Mumbai and Chennai, petrol was sold at Rs 75.13, Rs 80.30 and Rs 75.12 per litre respectively, also at over three-year high levels. Oil prices have hit their highest since December, 2014, pushed up after US crude inventories posted a 10th straight week of declines and as the dollar continued to weaken. Finally, the BSE Sensex declined 111.20 points or 0.31% to 36,050.44, while the CNX Nifty was down by 16.35 points or 0.15% to 11,069.65.