Markets to get a positive start of the new week

Indian equity markets on Friday continued their rising streak for the second day to end with gains of over half a percent. Sustained FII inflows and strengthening of rupee fuelled the uptrend. Today, the start of the new week is likely to be on positive side amid supportive global cues. Traders will be getting some encouragement with former Niti Aayog Vice Chairman Arvind Panagariya stating that the government has made a huge progress in implementing reforms including some difficult structural ones such as the Goods and Services Tax (GST) and Insolvency and Bankruptcy Code (IBC) that previous governments had difficulty in introducing.  He also said that the Centre should stick to the fiscal deficit target for 2018-19.  Meanwhile, the government expects to garner at least Rs 50 billion through share buyback offers of state-run companies, including Coal India, in the current financial year. Also, Prime Minister Narendra Modi will chair a meeting with top industrialists and policy makers today to brainstorm on measures required to realise his vision of India breaking into the top 50 in the World Bank's ease of doing business index. However, there may be some cautiousness as the government may push the Reserve Bank of India (RBI) to allow more active participation by government nominees to the central board in the decision-making process and keep them informed about key regulatory issues. The RBI board is scheduled to meet today amid an escalation in tension between the government and the regulator over liquidity, curbs on weak banks, capital requirements and the transfer of reserves among other things. A move may undermine investor confidence in the world’s fastest-growing major economy. The Textiles and apparel sector’s stocks will be in action on report that Textiles and apparel exports jumped by a staggering 33% in October on account of higher overseas demand. The country's textile and apparel exports stood at Rs 1,986 billion for October 2018 as against Rs 1,489 billion in the corresponding month last year. There will be some buzz in the Renewable Energy stocks as Indian Renewable Energy Development Agency (IREDA) said the government is planning incentives to promote renewable power and it has already issued tenders for setting up 26-GW clean energy capacities. IREDA Chairman K S Popli said India is planning to produce 50 GW (from clean energy sources) in the next few years.

The US markets closed mostly in green on Friday as President Donald Trump said China wants to make a deal on trade. He stated China has provided a large list of trade items the communist country is willing to compromise on but argued any trade deal has to be reciprocal. Asian markets were trading mostly higher on Monday after a buying spree on Wall Street kept up investor optimism into a new week.

Back home, key Indian equity indices ended the last trading day of week with decent gains, tracking firm global cues. The markets made a positive opening, as India’s exports rose by 17.86% to $26.98 billion in October 2018 as compared to $22.89 Billion in October 2017. Exports bounced back in October to high double-digit figures after the mild contraction in September as engineering goods, pharmaceutical and chemical shipments picked up the pace. During the April-October period of the current financial year, exports grew by 13.27% to $191 billion. Optimism also spread on the street, with Fitch indicating that India’s strong growth outlook continues to stand out among peers and upgraded its real GDP growth forecast at 7.8% for the current financial year ending March 2019 (2018-19) from 7.3% forecasted earlier in April this year. Market sentiments also got boosted with a private report stating that with bilateral trade between India and the South American country Peru touching an all-time high of $1.60 billion, the next round of talks for the free trade agreement (FTA) between the two countries is scheduled to take place next month. In the second half of the session, rally continued on the street, supported by Commerce and Industry Minister Suresh Prabhu’s statement that huge opportunities exist for startups in agri sector to promote the growth of the segment. He also said that innovation in agri sector was important for reducing wastage, increase production, and cutting fertiliser use to enhance soil fertility. Investors took note of Secretary of the Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek’s statement that the government will soon unveil a new industrial policy which may include a dedicated chapter on the importance of design. The street paid no heed towards a report showing that the trade deficit for the month of October 2018 widened to $17.13 billion v/s $13.98 billion in September on account of import growth again picked up. The deficit widened despite a decline of 42.9% in gold imports to $1.68 billion. Imports during the month also rose by 17.62% to $44.11 billion, leading to widening of trade deficit. Finally, the BSE Sensex gained 196.62 points or 0.56% to 35,457.16, while the CNX Nifty was up by 65.50 points or 0.62% to 10,682.20.