Sensex, Nifty likely to make a cautious start

Indian equity benchmarks ended higher on Thursday, with Sensex and Nifty closing at fresh record highs, as strong corporate earnings results, falling oil prices and uninterrupted foreign and domestic fund inflows helped investors shrug off muted cues from global markets. Today, the markets are likely to make a cautious start, amid mixed global cues. Traders will be eyeing the macro data of industrial production for June scheduled to be announced post market hours. Investors will keep a close eye on unfolding weather in the country after data released by the India Meteorological Department (IMD) showed that 39 percent of the 681 districts in India have received less than normal rainfall in the week ended August 8. However, traders will be getting some encouragement later in the day, with the Lok Sabha passing four bills to amend the GST law, as Finance Minister Piyush Goyal said lower tax rates will improve compliance and enhance revenue collection. He said tax collection will not come down despite reduction in taxes as he allayed the concerns to that effect raised by some members and added that the lower rates will rather improve compliance and enhance revenue collection. Meanwhile, the Securities and Exchange Board of India (SEBI) in its annual report for 2017-18 has said that it is planning to put in place measures to curb insider trading and misuse of unpublished price-sensitive information through timely announcements by listed companies. There will be buzz in the Pharma stocks with report that India’s pharmaceutical exports grew merely 3 percent to $17.3 billion in 2017-18 due to increasing regulatory concerns and pricing pressures in the global markets, including the US. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets ended mostly lower on Thursday, as traders remained reluctant to make significant moves as they weigh lingering trade war concerns against largely upbeat corporate earnings news. Asian markets were trading mostly in red on Friday, amid heightened global trade tensions.

Back home, Indian equity benchmarks extended previous session’s rally to end the Thursday’s trade at fresh record closing high levels, with Sensex and Nifty conquering their crucial 38,000 and 11,450 marks, respectively. After making a positive start markets traded in green throughout the day, as sentiments remained up-beat with the International Monetary Fund’s (IMF) statement that India is on track to hold its position as one of the world’s fastest-growing economies as reforms start to pay off. The $2.6 trillion economy was described by Ranil Salgado, the IMF’s mission chief for India, as an elephant starting to run, with growth forecast at 7.3% in the fiscal year through March 2019 and 7.5% in the year after that. Adding some optimism among the investors, Commerce and Industry Minister Suresh Prabhu said that the exports are showing good sign and registering increase at the rate of 20%. Meanwhile, the government will shortly unveil a new industrial policy that aims to speed up regulatory reforms and lower power tariffs to make businesses more competitive and create more jobs. Markets witnessed some hiccups in noon deals but managed to end comfortably above their crucial levels, as traders took some encouragement with a private report stating that optimism level among India’s chief financial officers for the July-September period has improved as compared to the previous quarter and going forward distribution of rainfall, raw material costs and revival in demand will be the key deciding factors. Sentiments remained buoyed with report that India’s average per capita income in the last four financial years was higher at Rs 79,882 as compared to the preceding four fiscals. As per the report, the per capita income grew by 4.6% in 2013-14 to Rs 68,572; 6.2% to Rs 72,805 in 2014-15; 6.9% to Rs 77,826 in 2015-16 and by 5.7% to Rs 82,229 in 2016-17. Finally, the BSE Sensex jumped 136.81 points or 0.36% to 38,024.37, while the CNX Nifty was up by 20.70 points or 0.18% to 11,470.70.