Markets to make positive start on firm global cues

Indian markets rebounded from six days of losses on Thursday, as trade worries showed signs of easing amid expectations that U.S. trade tariffs are likely to be differentiated by country and product. Today, the markets are likely to make an optimistic start following firm global leads. Traders will get some encouragement with report that the direct tax collections jumped by nearly 20 per cent between April and February this fiscal as the Income-Tax Department races to meet its full year targets. The net direct tax receipts grew by a hefty 19.5 per cent in the first 11 months of the fiscal amounting to Rs 7.44 lakh crore. Net corporate income tax collections increased by 19.7 per cent in the period, while personal income tax receipts grew by 18.6 per cent. Some support will also come with Economic Affairs Secretary Subhash Chandra Garg’s statement that the 7.2 per cent expansion in the economy during October-December quarter has put the country in one of the highest growth bracket in the world and recovery will continue to be sharp going ahead. The third quarter growth of 7.2 per cent was highest in five quarters. The previous high was recorded at 7.5 per cent in the July-September quarter of 2016-17. There will be buzz in telecom related stocks after Telecom Minister Manoj Sinha has asked India’s top carriers to focus on improving services instead of fighting among themselves, especially now that the government has cleared measures for immediate relief, which should drive investments.

The US markets closed higher on Thursday after President Donald Trump signed proclamations imposing tariffs on steel and aluminum imports. Trump announced last week that he planned to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. Asian markets were trading mostly in green on Friday as markets cheered news that U.S. President Donald Trump had agreed to meet North Korean leader Kim Jong Un.

Back home, Indian equity benchmarks ended the Thursday’s trade in green terrain with frontline gauges recapturing their crucial 33,300 (Sensex) and 10,200 (Nifty) levels, as traders opted to buy beaten down but fundamentally strong stock after six days of continuous drubbing. After making an optimistic start, markets almost pared all of their initial gains, as the Congress’ victory over the ruling BJP in Rajasthan local body polls and the Telugu Desam Party’s decision to pull out two of its ministers in the central government kept the underlying sentiment somewhat cautious. Markets started gaining momentum in noon deals as traders took encouragement with Niti Aayog vice chairman Rajiv Kumar’s statement that the country’s economy, which had witnessed slow growth due to decline in private investment and other factors, is on the rise again. He added that the employment should get due attention and that job creation would contribute to GDP growth as well. Some support also came from report that the Indian government reiterated its pitch for a sovereign rating upgrade to Fitch, citing strong macro-economic fundamentals. Fitch has a BBB-, the lowest investment grade sovereign rating on India, with a stable outlook. Some support also came with report highlighting that government is committed to bring down fiscal deficit in the medium term. The government also expects Asia's third largest economy to grow at 8 percent in the next couple of years. Besides, Prime Minister Narendra Modi’s statement that focus would be laid on development of 115 backward districts that he termed as ‘aspirational districts’, too provided some support to the markets. Investors took note of the report stating that the government sought Parliament nod for additional cash spending of Rs 85,315.30 crore in the current fiscal, of which 70 per cent is earmarked to compensate states for revenue loss on account of GST roll out. Minister of State for Parliamentary Affairs Arjun Ram Meghwal moved the fourth batch of Supplementary Demands for Grants for 2017-18 in the Lok Sabha. Finally, the BSE Sensex surged 318.48 points or 0.96% to 33,351.57, while the CNX Nifty was up by 88.45 points or 0.87% to 10,242.65.