Markets to make pessimistic start amid weak global cues

Indian stock markets edged higher on Tuesday even as the near-term economic outlook remained clouded with significant external and domestic headwinds. Today, the markets are likely to make pessimistic start, tailing weakness in global markets. Traders will remain little anxious with NITI Aayog CEO Amitabh Kant’s statement that India’s eastern states have done remarkably well on ease of doing business index, but he stressed that they need to repeat their progress on the human development index as well. He, however, said several Indian states remain backward on human development indicators because of legacy issues. However, traders will get some support later in the day with the Finance Ministry’s proposal of relaxing certain conditions for availing the concessional 10 percent long term capital gains tax. Listing out scenarios wherein individuals need not pay Securities Transaction Tax (STT) at the time of purchase to avail the concessional tax rate, the Finance Ministry invited stakeholder comments on the draft notification by April 30. Some support will also came with Union Commerce and Industry Minister Suresh Prabhu’s statement that the government has finalised a new industrial policy with a major focus on promoting setting up of industrial units in rural areas. There will be some important earnings announcements too, to keep the markets buzzing.

The US markets ended lower on Tuesday as traders shrugged off an initial positive reaction to earnings news from several big-name companies. Asian markets were trading lower, mirroring a sell-off on Wall Street on fears about slowing growth and falling company profits.

Back home, Indian equity benchmarks ended the Tuesday’s trade on an optimistic note with frontline gauges recapturing their crucial 34,600 (Sensex) and 10,600 (Nifty) levels. Markets made positive opening and traded with traction as sentiments remained up-beat with 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 also came 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. However, some amount of profit booking witnessed in afternoon session as traders turned anxious on the Petroleum and Natural Gas Ministry report which estimated that India’s crude oil import bill may increase 20% to $105 billion in this financial year from $88 billion in 2017-18, assuming average crude oil price of $65 per barrel for the year, about $9 a barrel less than the current rate. Markets once again got some strength in late trade with traders getting support from report that the Goods and Services Tax (GST) collections for March exceeded Rs 96,000 crore by April 23, the largest mop-up for any month since the comprehensive indirect tax’s launch in July last year. The report added that March collections could cross the coveted Rs 1 lakh crore mark by April-end, as payments are still being made by a section of taxpayers with late penalties. Some support also came with a report stating that several Thailand-based companies which are operating in India plan to invest around $3 billion in the next three years period in the areas of green and brown field projects including energy, infrastructure and metals. Finally, the BSE Sensex surged 165.87 points or 0.48% to 34,616.64, while the CNX Nifty was up by 29.65 points or 0.28% to 10,614.35.