Benchmarks likely to open marginally in green on Wednesday

Indian markets ended higher for fourth straight session on Tuesday, with Sensex closing at all-time high level supported by strong global cues. Today, the markets are likely to open marginally in green following positive trend in Asian peers. Traders will be getting some support with a report that India’s exports are likely to register an all-time high of $330 billion in FY19, amid slowing global merchandise trade growth. Besides, March exports are expected to be above $30 billion, buoyed by strong performances by engineering and pharmaceuticals sectors. Investors also looking for the outcome of Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), which started on April 02, to be announce on April 04. There are expectations of a cut in key lending rate by another 25 basis points to boost economic activities. However, there may be some cautiousness with a private report that the Central Board of Direct Taxes (CBDT) has collected Rs 1,117,416.5 crore (11.17 lakh crore) in total direct taxes in FY 2018-19, a shortfall of around Rs 83,000 crore or 7.4 percent of the Rs 12 lakh crore collection target. Traders may be concerned as the World Trade Organisation’s (WTO) forecasted that global trade growth is expected to be lower in 2019 than it was last year, citing widespread tensions and economic uncertainty. Meanwhile, SEBI has issued a circular regarding empanelment of insolvency professionals to be appointed as administrators under the regulator's framework. An administrator has to be a person registered as an insolvency professional with the Insolvency and Bankruptcy Board of India (IBBI) and empanelled with the board from time to time. There will be some buzz in the banking sector stocks with ICRA’s report that the quashing of RBI's 180-day period resolution or NCLT mechanism of NPA recovery by the Supreme Court can lead to negative impact for the banks if the loans are not resolved. It added that higher provisioning would have left banks wanting for more funds from government to meet credit and regulatory capital. There will be some reaction in telecom sector stocks with report that Cellular Operators Association of India (COAI), an industry body representing telecom companies, has sought implementation of the National Digital Communications Policy 2018 from the new government. The policy approved by the Cabinet in September last year aims to attract $100 billion investment and create 4 million jobs in the sector by 2022.

The US markets ended mixed on Tuesday, as investors looked for more signs of strength in the economy in the wake of growth worries. Asian markets are trading higher in early deals on Wednesday as investors looking for more concrete developments out of ongoing US-China trade talks set to continue in Washington.

Back home, key equity benchmarks extended their rally on Tuesday to end with strong gains. The markets began with marginal gains, on the back of sluggish growth of microeconomic indicators. The growth of eight core infrastructure industries slowed down to 2.1% in February 2019 as compared to 5.4% in February 2018, due to fall in output of crude oil and refinery products, while the Indian manufacturing sector lost its growth momentum in the month of March, on the back of softer increases in new orders, production, input buying and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 52.6 in March from 54.3 in February. Traders took a note of the report stating that apart from a shortfall of nearly Rs 35,000 crore in direct tax revenue, the Centre seems to have suffered a larger deficit of Rs 60,000 crore or thereabouts in its share of goods and services tax (GST) revenue also for the fiscal year (FY19). But, in volatile trade, key indices managed to add gains during noon deals, supported by the Reserve Bank of India’s (RBI) statement that it will inject long-term liquidity worth $5 billion into the banking system through dollar-rupee buy-sell swap for a tenure of three years. The swap auction will be held on April 23, 2019. Some comfort also came with a private report that the government has been able to contain its fiscal deficit around 3.4% of the GDP in 2018-2019 by resorting to withdrawals/cash support from public accounts and savings on expenditure. Adding relief, ratings agency CRISIL in its half-yearly report on credit movements said that system wide non-performing asset (NPA) ratios will improve by 180 basis points (bps) to 8.5 percent in March 2020 from FY19 levels on the back of moderation in slippages coupled with recoveries from the bankruptcy resolutions. It also noted that public sector banks (PSBs) will turn more profitable for first time in four years. Finally, the BSE Sensex rose 184.78 points or 0.48% to 39,056.65, while the CNX Nifty was up by 44.05 points or 0.38% to 11,713.20.