Markets likely to open in green; macro economic data eyed

After rallying over a percent gain in previous session, Indian markets witnessed bloodbath on Thursday with both Sensex and Nifty falling over 2% each, weighed down by sell-off across global markets spooked by escalating global trade tensions and warnings of a growth slowdown. Today, the markets are likely to make positive start amid falling oil prices. Marketmen will be eyeing the macro economic data of industrial production and consumer price inflation to be released after the market hours. Traders will be getting encouragement with Ficci’s latest quarterly survey showing that India’s manufacturing sector output is expected to register robust growth in the July-September quarter on account of higher production even as the hiring outlook for the sector remains subdued. The survey also revealed that exports to rise in the second quarter. Traders will also be reacting to the Revenue Department of the Finance Ministry’s statement that the government yet again increased import duty on several electronic items and telecom equipment to rein in current account deficit (CAD) and stabilise the rupee. Besides, Finance Minister Arun Jaitley said the number of direct taxpayers is expected to double to 7.6 crore during the five-year term of the present government on account of various initiatives like rationalisation of tax structure, lowering of rates and anti-black money measures. However, there may be some cautiousness with Reserve Bank of India’s data showing that the Central Bank remained net seller of the US dollar in August, as it sold $2.323 billion of the greenback in the spot market. There will be some reaction in oil marketing companies (OMCs) with report that allaying concerns about the return of fuel subsidy regime, Finance Ministry said the government asking oil PSUs to subsidise petrol and diesel prices by Re 1 per litre was a one-time thing and it does not intend to ask them to do it again.

The US markets extended losses to end lower on Thursday, as investors continued to fret over rising bond yields and the prospect of higher interest rates. Asian markets were trading mostly in green on Friday, even though they opened in red as traders took a breather after a global rout sparked by fears over higher US interest rates.

Back home, Bears back in the action on Thursday, as Indian equity indices registered sharp losses of over 2% to settle the session in red territory. After a gap-down opening, the markets remained under pressure, impacted by a private report stating that private equity and venture capital (PE/VC) investments in India declined 23% to $6.7 billion in the third quarter of this year as investors adopted a cautious approach. On a year to date basis however, PE/VC investments in India are higher by 17.4% and the investment tally also looks set to surpass the previous year high driven by some large deals in the pipeline, provided there is no major macro setback. Domestic sentiments also got hit with Federation of Indian Export Organisations (FIEO) President Ganesh Gupta’s statement that the delay in Goods and Services Tax (GST) refunds is mainly impacting small exporters who provide jobs in labour-intensive sectors. FIEO President made an uproar about pending refunds of Rs 22,000 crore, noting that this is creating liquidity problem for exporters and impacting overseas shipments. Markets pain deepen, after United Nations’ latest report noted that India lost $80 billion from natural disasters in 20 years and also ranks fourth among the top 10 countries that reported economic losses due to disasters. Adding more anxiety among the investors, International Monetary Fund Managing Director Christine Lagarde warned countries of the perils of a trade or a currency war, saying they could be detrimental to global growth and hurt innocent bystanders. The market participants paid no heed towards World Bank Official’s statement that an orderly depreciation of the rupee would increase competitiveness and relieve some of the pressures in capital market. The street even overlooked reports that the government will develop a Skill Index to encourage competition between districts and improve their skill development and training performance. Finally, the BSE Sensex plunged 759.74 points or 2.19% to 34,001.15, while the CNX Nifty was down by 225.45 points or 2.16% to 10,234.65.