Continuing their winning streak for the fourth straight session, Indian equity markets managed to eke out marginal gains on Thursday as domestic investors exercised caution and refrained from making big bets amid escalating trade war tensions. Today, the markets are likely to make a negative start following weakness in global markets as caution set in ahead of US Federal Reserve Chairman Jerome Powell's big Jackson Hole speech that could bring a dovish surprise. Traders will be concerned about a report that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. Also, there will be some cautiousness with a private report that the Goods and Services Tax (GST) collections may come in as a surprise for the government as collections for the month of July are likely to be lower on both year-on year basis and a month-on-month basis. As per the report, collections may range between Rs 89,000 crore and Rs 91,000 crore for July which are to be reported in August. However, traders may get some encouragement later in the day with report that India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries. Traders may take note of the Commerce Ministry’s statement that a National Logistics Portal is being developed to ensure ease of trading in the international and domestic markets, as India eyes lowering logistics cost from 14% of GDP to less than 10% by 2022. There will be some buzz in the sugar sector stocks with the food ministry extending the deadline for exporting 2 million tonne of sugar by three months to December as only a fourth of it has been shipped so far.
The US markets ended lower on Thursday as an ongoing trade war between the US and China and worries of renewed legal issues for President Donald Trump dampened investor sentiment. Asian markets were trading mostly in red on Friday after US-China trade talks ended without progress, with the markets braced for a speech by Federal Reserve Chairman Jerome Powell for hints on the direction of US monetary policy.
Back home, Indian equity benchmarks somehow managed to end the lackluster day of trade marginally in green on Thursday, as traders remained optimistic with the SBI’s latest research report ‘Ecowrap’ stating that the country’s GDP is expected to grow by 7.7 percent in the April-June quarter on the back of pick up in leading indicators like cement production, sale of vehicles and bank credit. Some support also came with Moody’s Investors Service’s report that the Indian economy is expected to grow by around 7.5 per cent in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices. In its Global Macro Outlook for 2018-19, Moody's said the run-up in energy prices over the last few months will raise headline inflation temporarily but the growth story remains intact as it is supported by strong urban and rural demand and improved industrial activity. Some support also came with the finance ministry’s statement that the government will meet the fiscal deficit target for the current fiscal although there could be some slippages in the current account deficit (CAD) because of high crude oil prices. However, gains remain capped on report that government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. Traders also took note of report that Securities and Exchange Board of India (SEBI) has extended the deadline by two months till December for providing a list of beneficial owners, and assured them that issues raised will be looked into by an expert panel, giving relief to foreign portfolio investors. Traders remained little cautious with NITI Aayog Vice-Chairman Rajiv Kumar’s statement that he was more concerned about the rising trade deficit than the falling rupee, and called for efforts to push exports. Meanwhile, the US has announced hefty preliminary anti-dumping duties on metal pipes imported from India, China and four other countries, in an aggressive tactic by the Trump administration to protect the American industry and lower the trade deficit. Finally, the BSE Sensex gained 51.01 points or 0.13% to 38,336.76, while the CNX Nifty was up by 11.85 points or 0.10% to 11,582.75.
