Markets to make positive start on firm global cues

Indian equity markets extended their winning streak to a ninth straight session on Tuesday after the IMD forecast that the country will receive normal monsoon for a third consecutive year. Today, the markets are likely to make an optimistic start amid firm global cues. Traders will get some encouragement with International Monetary Fund’s (IMF) statement that India’s GDP growth will accelerate in the current and next fiscal years as structural reforms raise potential output. GDP is forecast to grow 7.4 percent in the current fiscal from 6.7 percent in FY18 and accelerate further in FY20 to 7.8 percent. Market participants will also get some support with Commerce and Industry & Aviation Suresh Prabhu’s statement that the government is working with the US to resolve all trade issues even as America has decided to review India's eligibility to enjoy duty-free access for certain products under a tax benefit scheme. Meanwhile, the group of ministers (GoM) on Tuesday worked out a revamped return for goods and services tax (GST) to help ease the burden on businesses. Stocks related to sugar sector will get some boost with report that India's sugar production has touched an all-time high of 29.98 million tonnes till April 15 in the current season on higher cane output, leading to a surge in arrears to farmers at over Rs 20,000 crore. There will be some important earnings announcements too, to keep the markets buzzing.

The US markets ended higher on Tuesday as traders reacted positively to a report from the Commerce Department showing a rebound in housing starts in the month of March. The report said housing starts jumped by 1.9 percent to an annual rate of 1.319 million in March after tumbling by 3.3 percent to a revised 1.295 million in February. Asian markets were trading mostly in green, as investor confidence stayed firm on the back of Wall Street’s advance following strong earnings.

Back home, Indian equity benchmarks extended gaining streak for ninth straight session on Tuesday with frontline gauges ending just shy of 34,400 (Sensex) and 10,550 (Nifty) levels. Markets started the session on positive note with the World Bank forecasting a growth rate of 7.3% for India this year and 7.5% for 2019 and 2020, and noted that the country’s economy has recovered from the effects of demonetisation and the Goods and Services Tax (GST). The World Bank also said that India should strive to accelerate investments and exports to take advantage of the recovery in global growth. Some support also came with the India Meteorological Department (IMD) forecasting that the country will receive normal monsoon for a third consecutive year. However, gains remained capped as investors kept a wary eye on geopolitical tensions and oil price movements. However, markets took U-turn and entered into red terrain as traders remained anxious with former President Pranab Mukherjee’s statement that the country’s demographic dividend runs the risk of turning into a demographic disaster if employment is not generated. He added that the country has achieved an economic growth of 6-8% in the last couple of decades but the inequality among different classes of the society is still huge and unacceptable. Sentiments also remained dampened on media report that the shortage of currency reported in Andhra Pradesh, Telangana and Madhya Pradesh in the past few weeks has spread to a few more states. There were complaints of cash shortages in eastern Maharashtra, Bihar and Gujarat on Monday. The shortage is being felt despite currency in circulation crossing the pre-demonetization level. However, buying in final hour of trade helped markets to regain green terrain after Finance Minister Arun Jaitley said that there is more than adequate currency in circulation and with the banks. Meanwhile, Prime Minister Narendra Modi asked Niti Aayog to familiarise all ministries with the high-end technology and explain how it can be leveraged to address the country’s socio-economic problems. Finally, the BSE Sensex surged 89.63 points or 0.26% to 34,395.06, while the CNX Nifty was up by 20.35 points or 0.19% to 10,548.70.