Markets likely to make positive start amid firm global cues

Indian markets ended Thursday’s choppy trading session marginally in red as liquidity concerns and worries over the Reserve Bank of India’s (RBI’s) autonomy weighted on sentiments amid unabated foreign fund outflows. Today, the markets are likely to make a positive start tracking firm global cues on easing trade war worries. Traders will be getting some encouragement with finance minister Arun Jaitely’s statement that India’s target of being among the top 50 countries in World Bank’s Ease of Doing Business Rankings looks plausible. Also, there will be some support with a private report that India’s equity market capitalisation would grow at a compound annual rate of 12% to reach $6 trillion by 2028. Traders may take note of industry body, the Confederation of Indian Industry’s (CII) statement that the country needs to focus on areas like registering property and enforcing contracts to get even better ranking in the World Bank’s ease of doing business index in the coming years. Meanwhile, India may impose anti-dumping duty of up to $207.72 per tonne for a period of five years on a Chinese chemical used in the detergent industry to guard domestic manufacturers from cheap imports from the neighbouring country. Moreover, the Union Cabinet approved promulgating an ordinance to amend the Companies Act. The Corporate Affairs Ministry, which is implementing the Act, has been looking at ways to promote ease of doing business as well as ensure better compliance levels. There will be some buzz in the gold and jewellery industry related stocks with Commerce and Industry Minister Suresh Prabhu’s statement that the government is working to set up a Domestic Gold Council to promote the growth of the sector and boost exports of jewellery. He added that there are huge opportunities in the global market to push exports of gold jewellery. Also, there will be some reaction in airlines industry stocks with rating agency Crisil’s report that domestic airlines are projected to post the steepest losses in a decade in the current fiscal year owing to higher aviation fuel costs and falling rupee. There will be lots of earnings reaction, to keep the markets buzzing.

The US markets ended higher on Thursday as investors greeted the latest batch of earnings optimistically amid signs of easing trade tension. Asian markets were trading in green in early deals on Friday as China and the United States expressed optimism about resolving their bruising trade war.

Back home, key Indian equity indices ended volatile session on a flat note on Thursday, tracking mixed global cues. The trading day begun on a cheerful note, as India improved its ranking on the World Bank’s ease of doing business report for the second straight year. In its annual Doing Business 2019 report, World Bank (WB) said India jumped 23 places to rank 77th position on the back of reforms related to insolvency, taxation and other areas. But, the markets soon turned volatile to swing between gains and losses, affected by reports that the growth of eight core infrastructure industries slowed to four-month low of 4.3% in September 2018, as production of crude oil and natural gas declined. Anxiety also spread among traders with a private report stating that India, which is the second-most populated nation in the world and on the verge of becoming the youngest country, will start ageing in next 15 years. This 15-year window is the best time to create job opportunities and capitalize on country’s rich demographic dividend. Meanwhile, industry body Confederation of Indian Industry (CII) called for immediate action by the central bank to ensure sufficient liquidity in the financial market to prevent a potentially crippling credit crunch. However, the key indices erased their early losses to end the session with minor cut, supported by a report that the Indian manufacturing sector strengthened further in the month of October, on account of stronger order inflows and job creation. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - improved to 53.1 in October from 52.2 in September. The market participants also took support with Finance Minister Arun Jaitley’s statement that GST collections in October have crossed the Rs 1 lakh crore mark. The revenue from goods and services tax (GST) in September was Rs 94,442 crore. Adding some relief, the finance ministry said that India is likely to announce new steps to support small and medium-sized businesses, such as increased access to credit and financial markets, at an industry event on November 2. Traders took note of AIIB's Director General for Investment Operations Department, Yee Ean Pang’s statement that India is the biggest commitment country for the Asian Infrastructure Investment Bank (AIIB) which is interested in funding rural roads and transmission lines projects in the country. Finally, the BSE Sensex fell 10.08 points or 0.03% to 34,431.9705, while the CNX Nifty was down by 6.15 points or 0.06% to 10,380.45.