Markets likely to make sluggish start

Indian stock markets closed modestly higher on Monday, with IT bellwether TCS creating history by becoming the first Indian listed company to hit the coveted $100 billion m-cap figure. Today, the markets are likely to make cautious start amid weak global cues. Also, rising oil prices do not portend well for the Indian economy. However, traders will get some support later in the day with the World Bank’s statement that India retained the top position as recipient of remittances with its diaspora sending about $69 billion back home last year. Remittances to India picked up sharply by 9.9 per cent, reversing the previous year’s dip, but were still short of $70.4 billion received in 2014. Some support will also come with report that exports from special economic zones (SEZs) grew by about 15 percent to Rs 5.52 lakh crore in 2017-18. Export Promotion Council for EoUs and SEZs (EPCES) said that while the goods export from these zones stood at Rs 2.74 lakh crore in 2017-18, shipments of services aggregated to Rs 2.78 lakh crore in the last fiscal. Meanwhile, the government has finalised the new industrial policy, which is set to be announced soon. The new policy will replace the industrial policy of 1991 which was prepared in the backdrop of balance of payment crisis. There will be buzz in Information technology (IT) stocks, as investors will react to Infosys’ analyst conference call, held after market hours on Monday. There will be some important earnings announcements too, to keep the markets buzzing.

The US markets ended lower on Monday as traders seemed somewhat reluctant to make more significant moves, however, as a number of big-name companies are due to report their results in the coming days. Asia-Pacific stock markets struggled for direction in early deals and are trading mostly in red, as tech continued to lean on indexes in South Korea and Taiwan, but a weaker yen boosted Japanese shares.

Back home, in a very volatile day of trade, Indian equity benchmarks somehow managed to keep their head above water on Monday, as traders remained on sidelines ahead of an informal meeting between Prime Minister Modi and China’s Xi Jinping and developments around the impeachment notice against Chief Justice of India Dipak Misra. After making a cautious start, markets gained traction and traded in fine fettle for most part of the day as traders took some support with Reserve Bank of India (RBI) Governor Urjit Patel’s statement that India’s real GDP growth is expected to expand at 7.4% in 2018-19, with risks evenly balanced. He added that several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained. Some support also came with Economic Affairs Secretary Subhash Chandra Garg’s statement that India is poised to remain as the fastest growing large economy in the world. In 2018, we expect India to grow at over 7.4%. He added that India’s GDP is expected to reach a volume of $5 trillion by FY2025 by leveraging on digitisation, globalisation, favourable demographics and structural reforms. Adding to the optimism, IMF said Global investors feel that the Indian elephant is ready to run after sustained economic reforms. However, markets took U-turn and traders pared almost all of their early gains as sentiments turned cautious with PHD Chamber’s report that roadblocks such as delay in GST refunds and after effects of note ban hit India's export prospects in 2017-18 amid a revival in global demand mainly in key markets of the US and the EU. Some concerns also came with a report that with the Reserve Bank giving no relaxation to its February 12 framework on resolution of stressed assets, banks are likely to become more cautious and risk-averse to long-term funding, especially to the infrastructure sector. Anxiety spread on the street , as foreign investors have pulled out nearly Rs 8,000 crore from the Indian capital markets so far this month due to considerable volatility in global markets on account of the ongoing trade negotiations and firming up of bond yields. Finally, the BSE Sensex surged 35.19 points or 0.10% to 34,450.77, while the CNX Nifty was up by 20.65 points or 0.20% to 10,584.70.