Indian stock markets, after a day’s breather, resumed their record-setting rally to scale new peaks on Monday supported by strong global cues after Powell’s comment on fed rates. Today, the markets are likely to make an optimistic start as traders will be getting some encouragement with Economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report retaining India’s growth forecast for the current fiscal at 7.4%, citing comfortable agricultural sector outlook and a marked improvement in the external sector. There will be some support with the Department of Industrial Policy and Promotion’s (DIPP) latest data showing that foreign direct investment (FDI) in India grew by 23% to $12.75 billion during the April-June quarter of 2018-19, as compared to foreign fund inflows of $10.4 billion in April-June 2017-18. Traders will also be reacting to Commerce Minister Suresh Prabhu’s statement that the government is working on a comprehensive strategy to double the country’s exports by 2025. Traders may take note of finance minister Arun Jaitley’s statement that the desire to achieve a high growth rate must be accompanied by strong macroeconomic fundamentals. Meanwhile, India has initiated probe into alleged dumping of a certain type of steel imported from Brazil, China and Germany following a complaint BY a domestic player. However, there may be some cautiousness with SBI research report stating that the country’s current account deficit (CAD) is likely to touch 2.8% of GDP in the current financial year on surge in crude oil prices and moderate growth in exports. Besides, there will be some buzz in power sector stocks with a report that the Finance Ministry may soon hold talks with the Reserve Bank of India to resolve issues faced by the power sector.
The US markets ended higher on Monday as the United States and Mexico closed a new trade deal, potentially removing a source of uncertainty that had been plaguing investors for months. Asian markets were trading in green in early deals on Tuesday amid hopes global tariff tensions were abating as the United States and Mexico made a deal to overhaul the North American Free Trade Agreement.
Back home, bulls went brisk on Dalal Street on Monday, with frontline gauges logging new record highs for yet another day, ending just shy of their crucial 11,700 (Nifty) and 38,700 (Sensex) levels. After a gap-up opening, 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. Markets started the session on an optimistic note with report that former Niti Aayog vice-chairman Arvind Panagariya opined that rupee depreciation was long overdue, saying appreciated currency had hurt the country’s exports. He further said India’s macroeconomic management is sound and there was no reason to worry. Besides, the government is looking to complete nearly three-fourths of its disinvestment target by the end of December and has a pipeline of about 15 companies in which it will sell stakes to achieve this interim goal. Investors took encouragement with private report that India’s twin deficit and inflation are at a 'far more comfortable position' than in 2013. Markets extended gains after Finance Minister Arun Jaitley said that a series of reforms taken by the government transformed the weak economy. He also said that the reform measures has substantially cleaned up the system and made it more transparent, noting that decisiveness has led to easier decision-making and made the economy stand out before several other countries. Besides recent fall in oil prices and strong foreign portfolio investors’ (FPI) inflows will also support the domestic currency. Foreign investors have pumped in a little over Rs 6,700 crore into the Indian capital markets so far this month on improvement on the macro front, better corporate earnings and correction in the mid and small-cap space. Some support came in with a report stating that India and Singapore have signed the Second Protocol amending the Comprehensive Economic Cooperation Agreement (CECA) in order to boost bilateral trade. Besides, a private report highlighted that the Centre has lined up plans to raise a massive Rs 1.7 lakh crore via the extra-budgetary resources (EBR) route in the current fiscal, up 110% from FY18. Finally, the BSE Sensex surged 442.31 points or 1.16% to 38,694.11, while the CNX Nifty was up by 134.85 points or 1.17% to 11,691.95.
