Extending gains for second straight day, the Indian markets ended higher on Friday, following stability in crude oil prices and rupee after recent sharp moves. Today, the markets are likely to make negative start amid weak global cues. There will be some cautiousness with the State Bank of India’s (SBI) report that with the currency losing more than 11% to the dollar this year, India will have to shell out an extra Rs 68,500 crore when repaying short-term debt in the coming months. However, traders may get some comfort later in the day with the Reserve Bank of India’s (RBI) data showing that India’s current account deficit (CAD) as a percentage of GDP declined marginally to 2.4% in the April-June quarter of 2018-19 against 2.5% in the year-ago period. There may be some support with the government pegging the right value of the rupee at 68-70 to the dollar, asking foreign currency borrowers and importers not to panic. Economic affairs secretary Subhash Chandra Garg said that there was no reason for further depreciation of the Indian currency and no extraordinary measures were needed as of now. Traders may also be reacting to Federation of Indian Export Organisations’ (FIEO) statement that the commerce ministry should direct the Export Credit Guarantee Corporation (ECGC) to provide liberal insurance coverage to consignments with a view to promote overseas shipments. Meanwhile, in relief to foreign investors worried over new KYC and beneficiary ownership norms, regulator SEBI initiated a public consultation process for finalising the new guidelines after a high-powered panel suggested changes on several contentious proposals and more time for compliance. There will be some buzz in steel sector stocks with report that India may impose anti-dumping duty of up to $185.51 per tonne for five years on certain varieties of Chinese steel with a view to guard domestic players from cheap imports of the commodity from the neighbouring country.
The US markets declined on Friday amid ongoing trade concerns after President Donald Trump suggested he may impose tariffs on another $267 billion worth of Chinese goods. Asian markets were trading mostly in red early deals on Monday as trade tensions between the US and China remains in focus.
Back home, Friday turned out to be a fabulous day of trade for Indian equity benchmarks, with frontline gauges re-conquering their crucial 11,550 (Nifty) and 38,300 (Nifty) levels. Key gauges started the session on a pessimistic note, as traders remained concerned 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 turned optimistic and markets gained momentum to enter into green terrain 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 also took some support with 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. Markets extended gains in last leg of trade to end near intraday highs, as credit rating agency, ICRA in its latest report revealed that aggregate revenues of Indian corporate sector witnessed rise of 17.1% during the first quarter of the current fiscal year (Q1FY19), on a lower base in the year-ago period due to impact of GST implementation. Traders took some encouragement with reports that the newly notified annual GST return forms will go a long way in checking tax evasion by providing the entire financial transactions logged by an assessee to the revenue department. Some support also came with report that the Centre is planning to slash the number of GST rate slabs from the present five to two in the near future. Besides, the market participants took note of Federation of Indian Export Organisations’ statement that the commerce ministry should direct the Export Credit Guarantee Corporation (ECGC) to provide liberal insurance coverage to consignments with a view to promote overseas shipments. Finally, the BSE Sensex surged 147.01 points or 0.38% to 38,389.82, while the CNX Nifty was up by 52.20 points or 0.45% to 11,589.10.
