Markets likely to make optimistic start of new week

Indian markets extended their northward journey for fifth straight session and ended higher with notable gains on Friday on the back of heavy buying from foreign investors as well as domestic investors. Today, the start of the holiday truncated week is likely to be optimistic, tracking positive leads from global market. Traders will be getting encouragement with the trade ministry’s statement that India's trade deficit narrowed to $9.60 billion in February, dragged down by a fall in gold and oil imports, as compared to $14.73 billion in January. The data showed that in February, merchandise exports rose 2.44 percent from a year earlier to $26.67 billion, while imports were down 5.41 percent to $36.26 billion. Besides, gold imports in February fell 10.81 percent year-on-year to $2.58 billion, compared to $2.90 billion during the same month a year ago. Some support will also come with report that overseas investors poured in more than Rs 20,400 crore in the domestic capital market in the first half of March, mainly driven by positive global cues. Traders may take note of report that industry body Assocham released a charter of demands to make India a $5 trillion economy by 2025. Listing out the charter, Assocham in a statement said it wants political parties to pledge, among other steps, to enable growth rate of 8-8.5 per cent per annum. Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das will hold discussions on March 26 with representatives of trade bodies and credit rating agencies on interest rate and steps to boost economic activities. There will be some buzz in the banking sector stocks with credit rating agency ICRA’s statement that reduced net non-performing assets will drive considerable improvement in solvency of public sector banks (PSBs). Slippages will reduce during FY20 and reach levels of 1.9-2.4%, which is acceptable. Besides, banks may have to make higher provisions on loans to the power sector for the quarter ending March 2019 with the RBI saying that its February 12 circular continues to remain in force despite being challenged in the Supreme Court.

The US markets ended in green on Friday on positive signs regarding trade talks between the US and China as well as UK lawmakers voted to delay a potentially chaotic exit from the European Union. Asian markets rose in early trade on Monday, buoyed on speculation the US Federal Reserve will sound decidedly dovish at its policy meeting later in the week.

Back home, extending their gains for fifth straight session, Indian equity benchmarks ended Friday’s trade with a gain of around three fourth of a percent, with frontline gauges surpassing their crucial 38,000 (Sensex) and 11,400 (Nifty) levels. Sentiments remained upbeat throughout the session and markets started the day with a decent gains with traders taking encouragement with private report that the Reserve Bank of India's (RBI) $5 billion plan to swap rupees for dollars with domestic banks will help achieve its twin objectives of pushing interest rates down while also preventing a sharp appreciation in the rupee. Markets extended northward journey, as sentiment improved further with Commerce Secretary Anup Wadhawan’s statement that India's exports are likely to touch an all-time high of $330 billion in the current fiscal ending March 31 (FY19), braving global challenges such as protectionist measures. He added that the country’s engineering exports have grown significantly in recent years, notwithstanding major global challenges. Sentiments also remained jubilant with EEPC India-Deloitte strategy paper stating that India can achieve a three-fold 'aspirational' increase in its engineering exports to reach $200 billion by 2025, if concerted efforts are made by the government and industry to develop a conducive ecosystem, and ensuring inputs at competitive prices. Traders took note of the RBI’s statement that financial sector regulators discussed ways to address challenges pertaining to the quality of credit ratings and other issues concerning the economy. It added that the sub-committee reviewed the major developments on the global and domestic fronts that impinge on the financial stability of the country. However, traders trimmed some of their gains in last leg of trade, as investors remain little concerned with principal economic advisor’s report that the economic growth during the UPA era was ‘not bad’, but ‘the system was out of control’. The economy then faced problems of rising soaring inflation, widening and current account fiscal deficit. Finally, the BSE Sensex rose 269.43 points or 0.71% to 38,024.32, while the CNX Nifty was up by 83.60 points or 0.74% to 11,426.85.