Markets to make slightly positive start of new week

Extending losing streak for sixth straight session, Indian markets ended marginally lower on Friday on the back of rising oil prices and mixed global cues. Today, the start of the new week is likely to be slightly in green mirroring firm trade in Asian peers. Traders will be getting encouragement with the Commerce Ministry’s data showing that India’s merchandise exports grew 3.74 per cent to $26.36 billion in January from the same period last year as exports of gems and jewellery, chemicals and pharmaceuticals increased, coupled with nearly flat level of imports helping in narrowing the country’s trade deficit. Exports in January stood at $26.36 billion as against $25.41 billion in January 2018, while imports grew 0.01 per cent to $41.09 billion from $41.08 billion in the same period last year. Trade deficit for January 2019 was at $14.73 billion, down from $15.67 billion a year ago. Traders may also take note of report that Exporters body FIEO suggested a series of measures including outright exemption from GST, interest subsidy for agri-sector, and more funds for MSME players to boost outbound shipments. Some support may come with report that foreign investors have put in over Rs 5,300 crore into the Indian equity market in the first half of this month, primarily on account of positive view on the Interim Budget 2019-20. However, there may be some cautiousness with the Federation of Indian Chambers of Commerce (Ficci) and the Indian Banks’ Association (IBA) survey stating that Liquidity is expected to remain constrained till the end of March owing to factors such as higher demand for money at the end of 2018-19, the upcoming Lok Sabha elections and advance tax outflow. The survey said higher fiscal deficit too will be a factor in constraining liquidity. It covered areas like current liquidity and suggestions to improve it and enhance credit growth. There will be some buzz in the banking sector stocks with a private report that a majority of banks expect liquidity to remain tight in the last quarter of this fiscal despite a slight improvement in the situation. There will be some reaction in jewelry sector stocks with report that the country's gold imports dipped about 5% in value terms to $26.93 billion during April-January 2018-19, which is expected to keep a lid on the current account deficit. Also, there will be buzz in the steel sector stocks with the Joint Plant Committee’s (JPC) latest report showing that the country's exports of finished steel fell 37.3 per cent to 5.15 million tonnes (MT) in the April-January period of the current financial year. There will be lots of earnings announcements too, to keep the markets in action.

The US markets ended higher on Friday as US-China trade talks continued to buoy investor sentiment. Asian markets are trading in green on Monday as investors dared to hope for both progress at Sino-US trade talks in Washington this week and more policy stimulus from major central banks.

Back home, Indian equity benchmarks made a recovery to settle off their intraday low points on the last trading day of the week, with the Sensex and Nifty closing with a loss of around two tenth of a percent each. The start of the day was sluggish, with the economic research wing of SBI stating that it is erroneous to come to a conclusion of heightened economic activity using the jump in currency in circulation (CIC). It estimated that cash in the economy at Rs 20.4 lakh crore, stressing the rural economy continues to be depressed. It pointed out to data from leading indicators, including passenger car sales, commercial vehicle sales and two wheeler sales, among others, which shows a dip in activity, to point out that the higher CIC does not suggest a jump in economic activity. The market participants failed to take any sense of relief with reports that the government has set up an inter-ministerial committee headed by the finance minister to decide on exceptions and further inclusions of left-out farmers who fail to meet the existing eligibility criteria of the PM KISAN scheme. However, in the second half of the session, key indices managed to trim their losses, supported by Chief Economic Adviser K V Subramanian’s statement that the economic growth is expected to accelerate to 7.5% in next financial year (FY20), from 7.2% projected for the current financial year (FY19). He further stated in the last four years the GDP growth rate has been 7.3% that was highest across all government since liberalisation. Some relief also came with a report that Indian companies raised Rs 4.57 trillion through private placement of corporate bonds during the first 10 months of the current fiscal to meet business needs. According to the latest data available with the Securities and Exchange Board of India (Sebi), firms raked in Rs 4,56,962 crore during the April-January period of 2018-19 via private placement of corporate bonds, compared with Rs 4,87,764 crore garnered in the corresponding period last fiscal. In the full financial year 2017-18, companies had raised Rs 6 trillion through the route. Finally, the BSE Sensex fell 67.27 points or 0.19% to 35,808.95, while the CNX Nifty was down by 21.65 points or 0.20% to 10724.40.