Markets to make flat-to-positive start on Friday

Indian equity benchmarks edged higher on Thursday, with IT stocks leading the surge as a weakening rupee helped lift IT stocks. Today, the markets are likely to make flat-to-positive start as oil prices eased on expectations of a gradual increase in output from Russia and other large producers. Traders will get some encouragement with Care Ratings’ report that the country’s GDP growth will accelerate to 7.5 per cent this financial year, from 6.6 per cent in the last fiscal, on better performance from the industrial and agricultural sectors. Headline inflation, lending rates, fiscal prudence, current account deficit (CAD) and exchange rates, however, are the areas of concern. Some support will also come with NITI Aayog vice chairman Rajiv Kumar’s statement that States have the capacity and must reduce the duty on petrol, while the Centre should create fiscal space to deal with the impact of spurt in oil prices. The rising crude prices in the international market prompted state-owned oil companies to raise domestic prices for 11th day in a row. Petrol costs Rs 77.47 a litre in Delhi and diesel Rs 68.53 a litre. Meanwhile, Maharashtra Chief Minister Devendra Fadnavis has said that fuel prices will come down once the Centre builds a consensus to bring petrol and diesel under the Goods and Services Tax (GST).

The US markets ended lower on Thursday, following news President Donald Trump has called off the historic summit with North Korean leader Kim Jong Un. The president attributed the decision to call off the meeting to North Korea displaying tremendous anger and open hostility. Asian markets are trading slightly lower in morning trade following overnight news that U.S. President Donald Trump canceled a scheduled summit with Kim Jong Un.

Back home, Indian equity benchmarks ended the session in green terrain on Thursday with frontline gauges recapturing their crucial 34,600 (Sensex) and 10,500 (Nifty) levels. Markets traded with traction throughout the session as sentiments remained up-beat with report stating that India’s direct tax collections for the last financial year crossed the Rs 10 lakh crore mark, registering an increase of 18% over the previous fiscal. Key gauges started the session on an optimistic note, as traders took some encouragement with report stating that India has moved one notch higher, to the 44th place in terms of competitiveness, in the annual rankings compiled by International Institute for Management Development (IMD) which placed the US in the top slot. The US became the most competitive economy globally driven by its strength in economic performance and infrastructure, followed by Hong Kong and Singapore in the second and third place, respectively. Some optimism came with union minister Ravi Shankar Prasad’s statement that the government is working on a long-term solution to fuel prices. Meanwhile, the government has cleared amendments to the Insolvency and Bankruptcy Code (IBC), incorporating changes suggested by a government-appointed panel. Markets extended gains in last leg of trade with Oil Minister Dharmendra Pradhan’s statement that India is trying to get a resolution soon on tackling rising fuel prices, and the government is looking at both short-term and long-term solutions. Meanwhile, engineering exporters’ body, EEPC India said that India can make its export promotion schemes WTO- compliant and make the country’s exports competitive by allowing the exchange rate to reflect the real value of the rupee , that has only recently shown some parity, helping the exporting community. However, traders shrugged off Union Minister Nitin Gadkari’s statement that any cut in petrol, diesel prices will take money away from the government’s social welfare schemes. He added that the increase in oil prices is an unavoidable, economic situation, as India is now linked to the global economy. Finally, the BSE Sensex rose 318.20 points or 0.93% to 34,663.11, while the CNX Nifty was up by 83.50 points or 0.80% to 10,513.85.