Indian markets ended mix on Friday as trade war worries resurfaced and investors waited for Q1 GDP data release later in the day for directional cues. Rupee depreciation, which hit a historic low of 71 against the dollar, on worries about rising oil prices too weighed on markets. Today, the start is likely to be in green on the back of good economic data. India’s economy grew at its fastest in over two years, propelled by double-digit growth in manufacturing and robust consumer spending, making for a strong start to the last financial year before the ruling party faces polls in 2019. Gross domestic product (GDP) expanded quicker than even the most optimistic forecast at 8.2% in the First quarter of current financial year (Q1FY19). GDP had grown 5.6% in the year earlier quarter and 7.7% in the March quarter. Further, traders will also be getting some support with Principal Economic Adviser in the Ministry of Finance, Sanjeev Sanyal stating that the growth rate will be affected in next reading, but India would remain world’s fastest-growing major economy, as he countered scepticism over GDP growth rate. Meanwhile, RBI in its latest data has showed that Non-food credit growth in the system accelerated to 10.6 per cent for July as compared to the previous year, driven by loans to the services sector growing at a faster clip. However, there will be some cautiousness in the later part of day as the country’s fiscal deficit in the first four months of FY19 came in at Rs 5,40,257 crore or 86.5% of the FY19 target. Meanwhile, the eight core sectors of the economy saw a slight bump in its growth path in July, rising 6.6 per cent, down from an updated 7.6 per cent in June. Also, GST collections dropped to Rs 939.60 billion in August from Rs 964.83 billion in the previous month. There will be some buzz in the Banking stocks with Union Minister Ravi Shankar Prasad stating that the operations of the India Post Payments Bank (IPPB) will strengthen the financial inclusion programme in India and make country’s village systems stronger. Energy stocks may take note of India’s coal import rose 11.9% to 78.7 million tonnes in the first four months of the current fiscal.
The US markets closed slightly higher on Friday after President Donald Trump warned that he could pull the United States out of the World Trade Organization. Asian markets were trading mostly in red on Monday on worries about further escalation of the US China trade war and unstable emerging market currencies.
Back home, Indian equity benchmarks ended the first day of new F&O expiry series on quite note, as traders remained on sidelines ahead of first quarter gross domestic product (GDP) data to be released in evening of August 31. Markets made a cautious start as sentiments remain dampened with Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta’s statement that exporters are facing uncertainty due to a continuous depreciation of the domestic currency as they are not able to negotiate properly prices of goods in the global markets. Sentiments also weighed down after rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices. Some concerns also came after the International Energy Agency (IEA) said crude oil prices are likely to rise further in 2018 and may remain above $75 a barrel for some time, owing to the geo-political situations across the world - including Iran sanctions and drop in Venezuela production. Finally, the BSE Sensex declined 45.03 points or 0.12% to 38,645.07, while the CNX Nifty was up by 3.70 points or 0.03% to 11,680.50.
