Indian equity markets rose for a sixth straight session on Thursday even as overall gains remained limited amid rising oil prices and lingering concerns over a possible U.S. missile strike on Syria. Today, the markets are likely to make an optimistic start as reports on industrial output and inflation painted a positive picture of the economy. India’s industrial output grew 7.1 percent year-on-year in February, bigger than the expected 6.8 percent expansion. The cumulative growth for the period April-February 2017-18 over the corresponding period of the previous year stood at 4.3%. India’s Consumer Price Index (CPI) for the month of March came to 4.28% as compared to 4.44% in February. CPI food inflation for March also eased substantially to 2.81% versus 3.26% in last month. Traders will take some encouragement with report that the Confederation of Indian Industry (CII) is expecting India’s gross domestic product (GDP) to grow at 7.3-7.7 per cent during the 2018-19 financial year. This is based on strengthening demand in the rural economy, including agriculture and non-farm activities, as well as better global growth climate. Traders will also take some support with report that India’s merchandise exports are expected to grow 5.96 per cent during the fourth quarter ended March 31, 2018. There will be buzz in software related stocks as Infosys will unveil its Q4 earnings later in the day, with street expecting the IT firm to post good numbers compared to the previous year and signal better growth ahead.
The U.S. stocks edged higher on Thursday as President Donald Trump sought to downplay concerns about an attack on Syria. Some support also came with report that initial jobless claims fell to 233,000, a decrease of 9,000 from the previous week's unrevised level of 242,000. Asian markets were buoyed on Friday, with indexes in the region trading higher across the board after U.S. markets gained in the last session, as trade and geopolitical worries receded.
Back home, extending northward journey for sixth straight session, Indian equity benchmarks ended the Thursday’s trade in green terrain with frontline gauges recapturing their crucial 34,100 (Sensex) and 10,450 (Nifty) levels. Despite making a cautious start, markets gained strength and traded in green throughout the session as traders took some encouragement with report that India has jumped 13 places in the last one year to earn 130th spot in the latest annual Index of Economic Freedom released by a top American think-tank. In 2017, India with a score of 52.6 points was ranked at 143 among 180 countries, two spots below neighbour Pakistan. Some support also came with a report highlighting that FDI inflows have increased by 34% to an average of $10.2 billion quarterly since the NDA-government assumed power in 2014. The report notes that FDI inflows in India have nearly doubled to $42 billion in FY17. Markets extended rally in last leg of trade with traders taking some support with the International Monetary Fund’s (IMF) report stating that it is optimistic on the outlook for global growth but warned darker clouds are looming due to fading fiscal stimulus and rising interest rates. The trade conflict between the United States and China is creating significant uncertainty for businesses and their global supply chains. The street shrugged off a study published in RBI’s monthly bulletin that India’s social sector spending remains woefully below peers, including Latvia and Iceland, in terms of GDP. The social sector expenditure primarily constitutes health and education in India. The conclusion is based on an analysis of 17 countries, including India, with respect to their social sector expenditure as percent of GDP (2016). Meanwhile, former RBI governor Raghuram Rajan has said that proper implementation of the Goods and Services Tax (GST) in India can be worked upon and is not an unfixable problem. Finally, the BSE Sensex surged 160.69 points or 0.47% to 34,101.13, while the CNX Nifty was up by 41.50 points or 0.40% to 10,458.65.
