Markets to make positive start on Tuesday

Indian markets ended higher for second straight session on Monday on the back of value buying in bluechip stocks in the last leg of trade, despite disappointing macro-economic data and uninterrupted foreign fund outflows. Today, the markets are likely to make positive start amid firm Asian cues. Investors shifted their focus to September quarter earnings from global trade and geopolitical tensions. Traders will be getting some encouragement with report that India’s trade deficit declined to a five-month low in September even as exports contracted, providing some respite from the rising gap that has sparked concern about the current account deficit (CAD). Trade deficit declined to $13.98 billion in September from $17.39 billion in August following slower growth in imports. Besides, exports were pegged at $27.95 billion in September, down 2.15% from a year ago, while imports rose 10.45% to $41.9 billion, lowest in five months. However, there may be some cautiousness with markets regulator Securities and Exchange Board of India’s (SEBI) data showing that listed Indian companies raised over Rs 2 lakh crore in April-September this fiscal through private placement of corporate bonds, registering a sharp decline of 38% from the year-ago level. As per the data, in the entire 2017-18 fiscal, the capital raked in through the route stood at Rs 6 lakh crore. There will be some buzz in non-bank financial companies (NBFCs) stocks with Moody’s Investors Service’s statement that Indian NBFCs will be significantly impacted if the liquidity distress in the country’s capital markets, triggered by the default in September 2018 of IL&FS, prolongs for an extended period of time. There will be some important earnings announcements too to keep the markets buzzing.

The US markets ended lower on Monday as tech companies continued to slide. Besides, US- Saudi trade tension weighed down on investors’ sentiments. Asian markets were trading in green on Tuesday as moves in Treasury yields remained muted for a second session.

Back home, Markets managed to close volatile session on optimistic note on Monday, as both the larger peers, Sensex and Nifty logged the gains of 0.38% each. The markets started on the cautious note, amid weak macro-economic data. India’s industrial production measured by Index of Industrial Production (IIP) slowed down to a three-month low of 4.3% in the month of August 2018, as compared to 6.6% in the previous month and 4.8% in the same of last year, while retail inflation based on Consumer Price Index (CPI) inched up to 3.77% in the month of September 2018, as compared to a 10-month low of 3.69% recorded in August 2018 and 3.28% in September 2018. Sentiments were pessimistic with SEBI’s data report that capital garnered by Indian companies through issuance of shares to institutional investors dived by 78% to Rs 7,000 crore during the April-August period of the financial year 2018-19 as compared to Rs 31,153 crore raised during the corresponding period of the previous financial year. Traders also took a note of Reserve Bank of India’s (RBI’s) data report that the country’s foreign exchange reserves declined by $915.8 million to $399.609 billion in the week to October 5 on account of a fall in foreign currency assets. The trade remained lackluster, after India’s Wholesale price index (WPI) inflation also halted two-month easing trend in the month of September 2018, coming in line with rising retail inflation. As per the latest data released by the government, WPI surged to 5.13% in September from 4.53% in August and 3.14% during the corresponding month of the previous year. Adding some concerns, rating agency Moody’s in its latest report said that Non-bank financial institutions (NBFI) will be significantly impacted if the liquidity distress in the country’s capital markets, triggered by the default in September 2018 of IL&FS, prolongs for an extended period of time. However, in the last leg of the trade, the key indices erased all of their losses to settle the day in green terrain, supported by SBI Ecowrap report that the RBI is not expected to hike key lending rates in the current fiscal. The market participants got relief with credit rating agency Crisil Research’s report expecting the corporate revenue growth to grow by around 12% for the quarter ended September 30, 2018. This would mark the fourth consecutive quarter of double-digit growth. Finally, the BSE Sensex surged 131.52 points or 0.38% to 34,865.10, while the CNX Nifty was up by 40.00 points or 0.38% to 10,512.50.