Markets likely to make cautious start of new week

Indian markets recovered from two consecutive sessions of losses and ended higher on Friday supported by upbeat global cues amid hopes of an end to the battle between US and China. Today, the markets are likely to make a cautious start of the new week as investors awaited March-quarter corporate earnings. IT major TCS and Infosys will kick off the March quarter earnings season on April 12 as well as the first phase of general elections will take place later this week. Besides, Industrial Production data for February and CPI Inflation for March will be released on April 12. However, positive global cues are likely to support market sentiment. Traders may take some support with Finance Minister Arun Jaitley’s statement that India is expected to become the third largest economy in the world by 2030 with GDP touching $10 trillion, helped by consumption and investment growth. Currently, the size of the Indian economy is about $2.9 trillion. Talking about avenues of growth for the next 20 years, the finance minister listed infrastructure creation, rural expansion and gender parity, among others. Some support may also come with report that overseas investors have pumped in a net sum of Rs 8,634 crore into the Indian capital markets in the first five trading sessions of April, mainly due to positive market sentiment. Meanwhile, Commerce and Industry Minister Suresh Prabhu has underlined a need to develop a proper matrix to understand changes in the Indian economy and job creation that is happening at a rapid pace. There will be some buzz in the automobile industry stocks with CRISIL’s report that electric two-wheeler segment is expected to face a rough road in the initial phase of the FAME II Scheme with the exclusion of lead battery-powered such vehicles. There will be some reaction in aviation industry stocks with Civil Aviation Minister Suresh Prabhu’s statement that aviation turbine fuel (ATF) should be brought under the Goods and Services Tax (GST) regime as it will ensure a level playing field for the domestic airline industry. He said input costs should be competitive for any sector and the ministry has been of the strong view that the fuel should be brought under the GST regime.

The US markets ended higher on Friday on solid US job data report and optimism over US-China trade talks. Asian markets are trading mostly in green on Monday on the back of better-than-expected jobs data in the US and reports of progress in trade negotiations between Washington and Beijing.

Back home, late hour flourish helped the equity markets to end the last trading day of the week on higher note, with Sensex and Nifty reclaiming their crucial psychological levels of 38,800 and 11,650, respectively. Markets made a positive start of the day, aided by Finance Secretary Subhash Chandra Garg’s statement the government is close to meet fiscal deficit target of 3.4% for 2018-19. The government in the interim Budget in February revised upward the fiscal deficit target to 3.4% from 3.3% of Gross Domestic Product (GDP) estimated earlier for the financial year ended March 31. Some optimism also came after the Central Board of Direct Taxes (CBDT) said that it added 1.07 crore new taxpayers in financial year 2018 (FY18) as compared to 86.16 lakh new ITR filers added during financial year 2017 (FY17), showing the positive impact of demonetization. CBDT stated that demonetization had a phenomenal positive impact on the widening of tax base and direct tax collections. Key indices added gains in last leg of the trade, tracking firm European markets. Trading sentiments got boost as Finance Minister Arun Jaitley said that India’s growth has stabilised between 7-7.5% and irrespective of global trends, domestic consumption is going to increase. He also said that if India can maintain its position as the fastest growing major economy in the world for the next 10 years, it could become a reasonably middle-income economy, reducing poverty to negligible levels. Adding some comfort among investors, Commerce and Industry Minister Suresh Prabhu said that the proposed new industrial policy has been finalised and the new government very soon will announce that.  The market participants paid no heed towards reports showing that Fitch Ratings kept India’s sovereign rating unchanged at the lowest investment grade of BBB- with a stable outlook. This is the 13th year in a row that Fitch has rated India at BBB-. Finally, the BSE Sensex gained 177.51 points or 0.46% to 38,862.23, while the CNX Nifty was up by 67.95 points or 0.59% to 11,665.95.