The Indian markets snapped three day losing streak and staged a strong recovery on Thursday, tacking rebound in European markets along with value buying in beaten-down stocks. Today, the markets are likely to make a cautious start amid weak global cues. There will be some cautiousness with NITI Aayog CEO Amitabh Kant’s statement that India needs to cut down on oil imports and switch towards electric mobility, and stressed on the Centre’s focus towards urban mobility. However, traders may take some support with Union Minister for Commerce and Industry Suresh Prabhu’s statement that with phenomenal changes in social and economic sector reforms, India will become a five-trillion-dollar economy in seven years from the present 2.6 trillion dollars. Traders will also be reacting to a report that India and the US on September 6, pledged to expand their bilateral trade and economic partnership with a view to promoting investment and job creation. There will be some reaction among the public sector banks (PSBs) stocks with report that a parliamentary committee has urged the Reserve Bank of India (RBI) to relax the capital-adequacy norms for at least nine out of 21 PSBs that may free up capital up to Rs 5.34 trillion, helping the expansion of lenders. There will be some buzz in the tyre sector stocks with ICRA’s report that expected decline in the Indian natural rubber (NR) output by 18 to 20% this fiscal year will adversely impact the tyre industry. It has cited the flood in Kerala due to unusually high rainfall as the cause for the sharp fall in NR which accounts for 35% of the overall input costs in the manufacture of tyres. There may be some buzz in gold related stocks with a private report that India’s gold imports more than doubled in August to hit their highest level in 15 months as lower prices prompted manufacturers to replenish inventory for a jewellery exhibition.
The US markets ended mostly lower on Thursday with technology shares falling on worries about government regulation and uncertain demand in some segments. Asian markets were trading mostly lower on Friday as investors feared a new round of Sino-US tariffs could come at any moment, while a slump in US chip stocks rippled through the tech sector.
Back home, Snapping three days losing streak, Indian equity benchmarks ended the Thursday’s trade in green terrain with frontline gauges recapturing their crucial 38,200 (Sensex) and 11,500 (Nifty) levels. Markets gained strength soon after their cautious start, as traders took encouragement with Finance Minister Arun Jaitley’s statement that there is no need to worry over the steep fall in the Indian rupee’s value against the US dollar as the inherent strength of the country’s economy will aid in arresting the downtrend. Some support also came with the Finance Ministry’s statement that Goods and Services Tax (GST) refunds can be claimed by simply submitting a printout of GSTR-2A form to tax authorities instead of giving all purchase invoices of a month. Traders also took note of the Securities and Exchange Board of India’s (SEBI) statement that it would review an order tightening rules on foreign funds ownership by entities of Indian origin, after some fund managers said it could lead to massive dollar outflows. Markets pared all of their gains in noon deals to turn red, as Indian rupee touched a fresh record low of 72 against the US dollar amid concern that US President Donald Trump may order additional tariffs on China. This was the seventh consecutive fall, its longest losing streak since May 2016. However, selling proved short-lived and markets regained momentum to enter into green terrain, as market participants got some relief with private report that companies are willing to raise their staff level, and the pace of hiring is expected to be faster than last year, riding high on strong demand conditions. Optimism remained among the investors with a private report stating that Corporate India announced merger and acquisition (M&A) deals worth $34.8 billion during April-June this year, registering nearly 7-fold jump over the same period last year. Adding some comfort, Finance Ministry simplified GST refund claim process for businesses. Finally, the BSE Sensex surged 224.50 points or 0.59% to 38,242.81, while the CNX Nifty was up by 59.95 points or 0.52% to 11,536.90.
