Benchmarks likely to open in green on Friday

Indian markets ended Thursday’s volatile session in green territory as positive global cues helped underpin sentiment. Today, the start is likely to be in green mirroring firm trade in Asian peers. Traders will be getting some encouragement with Minister of State for Agriculture Parshottam Rupala’s statement that the government will soon announce a package for farmers to boost their income, amid speculations that the Centre is considering various measures to address distress in the farm sector. There will be some support with apex exporters body, Federation of Indian Export Organisations (FIEO) stating that the tariff war between the US and China is benefitting India as its exports to the neighbouring country have increased by about 32 per cent during the June-November 2018 period to $8.46 billion. Exports to China had stood at $6.37 billion in June-November 2017. Growth in exports to China is beneficial for India as it has huge trade deficit with the neighbouring country. Traders will also be reacting to Singapore’s health minister stating that India has emerged as one of the world’s most-dynamic economies, developing at a great pace and keeping at the forefront of technology and social innovation. There will be some buzz in the telecom sector stocks as Telecom regulator Trai ruled out an extension of February 1 deadline for migration to the new regime for broadcasting and cable services and said it had assurances from service providers that work related to seeking consumer's choice of channels is in full swing. There will be some reaction in banking sector stocks with report that Piyush Goyal, who has been given an additional charge of the finance ministry in the absence of Arun Jaitley, is scheduled to meet chiefs of the state-owned banks on January 28 to review financial performance of the banks. Among the key issues, the meeting will take up the matter of credit flow to MSMEs, agriculture and retail sectors. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets ended mixed on Thursday following downbeat comments from Commerce Secretary Wilbur Ross that US is miles and miles from a trade deal with China coupled with the failure of congressional votes to reopen the government. Asian markets were trading in green on Friday despite fresh overnight uncertainties about US-China trade negotiations.

Back home, Thursday turned out to be a volatile trading session but key Indian equity benchmarks managed to end the session in green terrain near their crucial psychological levels of 36,200 (Sensex) and 10,850 (Nifty). After a cautious start, the markets altered between green and red terrain frequently, impacted by a report that the goods and services tax (GST) collected in January (for December) is seen to be the lowest in the current fiscal. While the average collections during April-December were Rs 96,800 crore a month, the collections in January are around Rs 93,000 crore. Anxiety also spread among the investors with German Chancellor Angela Merkel’s statement that countries like India and China have begun affecting the world economy much more today and that needs to be taken into account for having a relook at the global trade and financial systems. But, in the last leg of the trade, key indices held their heads above neutral lines, tracking firm cues from global markets. Traders took encouragement with Crisil Ratings’ latest 'India Outlook FY20' report stating that India’s economic growth may improve to 7.3% in the fiscal year 2019-20 (FY20), provided that there are normal rains, oil prices lower than 2018 and a stable political outcome of the general elections. It added that India is expected to clock a growth rate of 7.2 percent in the current financial year, up from 6.7 percent in 2017-18. The street got relief, amid reports that the Reserve Bank of India (RBI) will change its stance to 'neutral' next month and cut interest rates in June at the latest. Some support came with the United Nations' World Economic Situation and Prospects (WESP) 2019 report stating that India's economy is expected to grow at 7.4 per cent during 2018-19 and improve to 7.6 per cent in the next fiscal. It added that growth continues to be underpinned by robust private consumption, a more expansionary fiscal stance and benefits from previous reforms. Finally, the BSE Sensex gained 86.63 points or 0.24% to 36,195.10, while the CNX Nifty was up by 18.30 points or 0.17% to 10,849.80.