Markets to make weak start ahead of macro-economic data; TCS, Infosys results eyed

Indian equity markets ended Thursday’s range-bound trading session on flat note with positive bias, on account of neutral foreign institutional investors (FIIs) and global sentiments. Today, the markets are likely to make a weak start ahead of macro-economic data and March-quarter corporate earnings amid mixed global cues. Market-men will be eyeing the macro economic data of industrial production for February and consumer price inflation for March to be released after the market hours. Traders will also be looking for fourth-quarter and year end corporate earnings for the financial year 2018-2019, with Tata Consultancy services (TCS) and Infosys reporting quarterly results today. There will be some cautiousness with report that after 108 economists and former RBI Governor Raghuram Rajan, International Monetary Fund's (IMF) Chief Economist Gita Gopinath expressed doubt over India's growth rate, saying that there are still some issues with the way India calculates it. However, some support may come later in the day with report that the Reserve Bank of India (RBI) injected a total liquidity of Rs 2.98 lakh crore in the market in 2018-19. From a daily net average surplus of Rs 27,928 crore during February 1-6, 2019, systemic liquidity moved into deficit during February 7-March 31, reflecting the build-up of government cash balances. Traders may be reacting to the RBI’s data showing that foreign investment of Indian companies grew 18 per cent to $2.69 billion in March as compared to the year-ago period. Traders may take note of NITI Aayog and Rocky Mountain Institute (RMI) study stating that Electric Vehicles (EVs) sold in India through 2030 can save 474 million tonne of oil equivalent, worth Rs 15.2 lakh crore over their lifetime. There will be some buzz in the tyre industry stocks with rating agency Icra’s report that the domestic tyre demand is expected to grow in the range of 7-9 per cent over the five year period between 2018-19 to 2022-23. It added that the market would also continue to witness investments over the period of next three years. There will be some reaction in banking sector stocks with the RBI’s data showing that bank credit rose 13.24 percent to Rs 97.67 lakh crore for the fortnight to March 29, while deposits grew by 10.03 percent to Rs 125.72 lakh crore during the same period.

The US markets ended mostly lower on Thursday as investors looked ahead to bank results that will kick off first-quarter earnings season. Asian markets are trading mixed on Friday as investor caution prevailed ahead of the release of first-quarter corporate earnings, although stronger US economic data helped offset some concerns about global growth.

Back home, Indian equity bourses staged recovery to close the Thursday’s trading session in green terrain, with Sensex and Nifty reclaiming their crucial psychological levels of 38,600 and 11,550, respectively. After cautious start, key indices traded volatile during the whole session, affected by Federation of Indian Export Organisations’ (FIEO) statement that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months. Investors also got worried after the International Monetary Fund (IMF) favoured bolstering the level of capitalisation of some banks, particularly government-owned banks, noting that the level of non-performing loans in India remains high. Besides, the market participants remained cautious ahead of releases of March quarter earnings and inflation data. In the last leg of the trade, markets managed to erase their losses and ended higher. Traders got relief with reports that the government extended the last date for filing final sales return form GSTR-1 for March by two days till April 13. Similarly, the due date for furnishing tax deducted at source (TDS) return GSTR-7 for March has also been extended till April 12. The last date for filing GSTR-1 and GSTR-7 for the month was April 11 and April 10, respectively. Separately, Finance Minister Arun Jaitley has discussed India's economic reforms and outlook for the future with investors in US. The street paid no heed towards the Agricultural and Processed Food Products Export Development Authority’s (APEDA) data showing data the country's exports of agricultural and processed food products have dipped by 2.27 per cent to $16.27 billion during the April-February period of 2018-19, on account of contraction in shipments of buffalo meat, wheat and non-basmati rice. Finally, the BSE Sensex gained 21.66 points or 0.06% to 38,607.01, while the CNX Nifty was up by 12.40 points or 0.11% to 11,596.70.