Markets to make a positive start of the new week

Indian equity markets ended slightly higher on Friday, as investors prefer to book profits at higher levels. Today, the start of the new week is likely to be in green, tracking gains in Asian equities following favorable US jobs data. Besides, investors will be eyeing the start of the official earnings season this week to gauge the performance of India Inc in the first quarter. Traders will be getting some support with industry body Assocham’s statement that the government’s decision to hike the minimum support price (MSP) for 14 khariff crops would boost farmers’ income, resulting in a huge rural demand push to the Indian economy. Meanwhile, foreign investors have pumped in over Rs 3,000 crore in the Indian capital markets in the last five trading sessions after pulling out hefty funds during April-June. The recent infusion comes following a net outflow of more than Rs 61,000 crore in the last three months. Prior to that, they had poured in Rs 2,662 crore in March. Besides, a report by the World Trade Organization (WTO) showed that India has initiated far more number of measures widely considered to be trade restricting since last year, when the US and China began locking horns on a global trade war spanning hundreds of billions of dollars. There will be some buzz in the steel sector, with a private report that India’s crude steel output grew six per cent to 26 million tonne (MT) in the first quarter of the ongoing financial year. The country had produced 24.5 MT of crude steel during April-June, 2017-18. Banking stocks will be in focus on report that Public sector banks are planning to tap the markets to raise more than Rs 50,000 crore this fiscal to shore up their capital base for business growth and meeting regulatory global risk norms.

The US markets ended higher on Friday, as strong US jobs growth blunted the impact of an escalating US-China trade dispute. Asian markets were trading in green on Monday, as investors set aside concerns about escalating trade tensions to prepare for the latest earnings season after signs of continued economic strength.

Back home, Indian equity benchmarks ended the Friday’s session with marginal gains, as traders opted to book most of their early gains in last leg of trade. Markets, soon after a cautious start, gained traction and traded superbly for most part of the day as traders took some support with private report that a lower base in the previous year’s quarter and likely good show by select companies in sectors such as automobiles, capital goods, FMCG, IT, and metals should help the Nifty 50 companies report a double-digit growth in aggregate sales and profits for the June 2018 quarter. Markets extend gains, as optimism remained on the street with a private report stating that the Indian engineering exports have managed to grow by close to 20% for the April-May, 2018, reflecting a so far so good scenario even as the US - China tariff war has spread to some key trading markets in Europe, Canada and Mexico and shows no early signs of abating. Some support also came with private report stating that economic activity is indeed improving after robust services PMI data showed that the manufacturing sector is growing at a robust pace, providing a big boost to the government at the centre. Adding to the optimism, India’s outgoing chief economic advisor Arvind Subramanian said that the country can handle shocks from external factors like high oil prices and a strong dollar. However, market participants trimmed their gains in last leg of trade and dragged markets lower to end off day’s high on report that the increase in minimum support prices (MSP) by the government is set to bump up the Reserve Bank of India’s already heightened inflation forecast and will likely lead to higher interest rates at the next monetary policy review on August 1 and possibly another before the year ends. Finally, the BSE Sensex rose 83.31 points or 0.23% to 35,657.86, while the CNX Nifty was up by 22.90 points or 0.21% to 10,772.65.