Markets likely to make positive start

Trimming some of the early gains, domestic equity markets ended marginally higher on Wednesday, as investors remained cautious amid escalating trade war concerns between the US and China. Today, markets are likely to make positive start, ahead of the release of macroeconomic data. Industrial growth (IIP) for May and retail inflation (CPI) for June data will be release later today. Traders may take some encouragement with a report that India has become the world’s sixth largest economy overtaking France. According to World Bank data on gross domestic product (GDP) of countries for 2017, India’s gross domestic product (GDP) stood at $2.597 trillion at the end of 2017, compared to $2.582 trillion for France. Some support may also come with the International Labour Organization (ILO), an arm of the United Nations, report that if 40% of India’s electricity comes from renewables by 2030 (from 7.5% in February 2018), the country could add about 3 million new jobs. There will be some buzz in telecom sector stocks, with report that the Telecom Commission approved the new telecom policy - National Digital Communications Policy (NDCP), 2018 - aimed at promoting investments, ease of doing business, and emerging technologies like 5G. There will be some buzz in real estate sector related stocks with a private report that the private equity (PE) investment in Indian real estate sector grew by an average 36% annually to reach $8.6 billion in 2017 from $2.5 billion in 2014.

The US markets snapped four-day winning streak to end lower on Wednesday, after the Trump administration announced new tariffs on Chinese goods, further escalating tensions between the two largest economies in the world, which some investors fear could morph into a full-on trade war. Asian markets were trading in green in early deals on Thursday, with markets shaking off some of the trade jitters seen overnight after the Trump administration announced a list of Chinese goods that may be subject to new tariffs.

Back home, Indian equity benchmarks ended the volatile day of trade almost flat, as traders remained on sidelines ahead of Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be released on July 12, 2018. Markets traded between green and red terrain throughout the session and ended with negligible gains, keeping their head above water on Tuesday, as traders took some support with report that the Global Innovation Index (GII) has ranked India as the 57th most innovative nation in the world. The country has improved its ranking from 60th position last year. India has been improving steadily since it was ranked 81st in 2015. Investors’ sentiments got improved as updated World Bank figures for 2017 showed that India is now the world's sixth-biggest economy, having muscled past France, which was pushed to the seventh spot. India's gross domestic product (GDP) stood at $2.597 trillion at the end of 2017, compared to $2.582 trillion for France. Market participants also got some support with union minister for electronics and IT Ravi Shankar Prasad’s statement that India is the third largest investor in the United Kingdom and emerged as the second largest international job creator with Indian companies having created over 110,000 jobs in the UK in recent months. The domestic sentiments also remained upbeat with a report that India and South Korea have inked 11 MoUs, including an agreement to discuss upgrade of the Comprehensive Economic Partnership Agreement (CEPA), with an aim to increase bilateral trade to $50 billion by 2030. However, gains remained capped as traders remain concerned with India’s G-20 Sherpa Shaktikanta Das, expressing concern over increasing protectionism and trade conflicts across the world, said that countries ought to work out arrangements that are beneficial to all in the larger interest of reviving global growth. Some cautiousness crept in with a private report stating that Indian inflation likely rose to a near two-year high in June, driven by surging oil and food prices, a development that would strengthen calls for more monetary policy tightening by the Reserve Bank of India.