Extending previous session’s rally, Indian equity markets ended at fresh record closing highs on Monday, amid positive global cues and some recovery in the rupee. Today, the markets are likely to make a flat-to-positive start amid mixed global cues. Traders will be getting some encouragement with a private report that India has been remarkably resilient in the recent turmoil in emerging market equities largely driven by macro stability, low policy uncertainty, improving growth and domestic flows. There will be some support with Retirement fund body the Employees’ Provident Fund Organisation (EPFO) payroll data suggesting that as many as 47.13 lakh jobs were created during September 2017 to June this year. Traders will also be reacting to report that Commerce and industry minister Suresh Prabhu reviewed two proposed policies- on agriculture export and new industrial policy to take the country’s exports to a new level. Meanwhile, the Securities and Exchange Board of India (SEBI) is considering doubling or even quadrupling the minimum ticket size for investment in portfolio management services (PMS) schemes. There will be some buzz in the steel sector stocks with report that India’s steel ministry has strongly opposed the inclusion of finished steel products in the proposed regional free-trade agreement, saying it would have an adverse impact on the industry that’s recovering from a crisis. There will be some reaction in aviation sector related stocks with report that giving in to demand from the airlines, the GST Council may propose to bring Aviation Turbine Fuel (ATF) under the indirect tax regime in its next meeting.
The US markets rose on Monday on optimism over trade talks between the United States and China, though they fell from session highs after President Donald Trump criticized the Federal Reserve’s raising interest rates. Asian markets were trading mostly in green on Tuesday, as investors optimistically looking ahead Wednesday’s release of the minutes from this month’s FOMC meeting as well as a meeting of central bankers later this week.
Back home, bulls took full control over Dalal Street on Monday and frontline gauges settled at their fresh closing high levels, conquering their crucial 11,550 (Nifty) and 38,200 (Sensex) levels for the first time ever. After a gap-up opening, markets traded with traction and there appeared not even an iota of profit booking in the session with benchmarks fervently gaining from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Sentiments remained jubilant with traders taking encouragement from former chief economic advisor Arvind Virmani’s statement that India’s economic growth seems to be back on a recovery path and the country will be on a firm 7.5% plus growth track this fiscal. He also said the US-China tariff war provides an opportunity to increase India’s exports to the US. Adding to the optimism, the Central Board of Direct Taxes (CBDT) said that income Tax collection in the country stood at a record Rs 10.03 lakh crore during 2017-18. It also said during 2017-18, a record number of 6.92 crore I-T returns were filed, which was 1.31 crore more than 5.61 crore returns filed in 2016-17. Markets extended rally in second half of trade to settle near intraday highs with Fitch Ratings in its latest report stating that the impact of currency weakness on India’s sovereign credit profile is likely to be limited on the back of relatively strong external finances, especially the low level of external debt. It also said currency depreciation could nevertheless add to existing pressures in the corporate and banking sectors. Meanwhile, market participants took note of report that the International Labour Organisation said India needs strong wage policies to promote inclusive growth as inequality, informality and gender wage gap still persists in India. Traders shrugged off report that India’s current account deficit (CAD) will widen to 2.5 per cent of the GDP in the current fiscal due to higher oil prices that has been accentuated by rupee depreciation. Finally, the BSE Sensex surged 330.87 points or 0.87% to 38,278.75, while the CNX Nifty was up by 81.00 points or 0.71% to 11,551.75.
