Markets likely to make cautious start amid weak IIP, CPI data

Indian markets ended choppy trading session in green territory on Friday mainly on the back of late buying. Today, the start of a holiday-shortened week is likely to be cautious amid weak macro-economic data. The Ministry of Statistics and Programme Implementation data has showed that industrial growth fell to its lowest in 20 months in February, barely rising from a year ago as manufacturing contracted following muted consumer demand, and public investment slowed toward the fiscal year-end. The index of industrial production (IIP) rose 0.1%, the slowest since a 0.3% contraction in July 2017. Besides, the Central Statistics Office (CSO) data showed that India's retail inflation saw a marginal rise of 2.86% in March on account of increase in prices of food articles and fuel. The inflation based on Consumer Price Index (CPI) was 2.57% in February this year. On yearly basis, it was 4.28% in March 2018. Also, there will be some cautiousness with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the biggest risk facing emerging market economies is growing evidence that global growth and trade is weakening. At the same time, emerging markets face a wave of global spillover risks leading to capital outflows, currency and asset price volatility besides tightened financial conditions, posing risks to growth and inflation. However, some support may come in with firm global cues. Traders may take note of better-than-expected earnings from Tata Consultancy Services (TCS) and Infosys. TCS ended fiscal 2019 with double digit revenue growth as the company reported a 11.4% growth in constant currency terms in the fiscal ending March 31. This is TCS' fifth straight quarter of year-on-year double-digit revenue growth in constant currency terms. Infosys reported a net profit of Rs 4,074 crore for the quarter ended March 31, 2019, a growth of 10% year-on-year, helped by strong growth in its key financial services segment and large deal wins during the period. There will be some buzz in the steel industry stocks with report that India's finished steel exports fell more than a third in the 2018/19 fiscal year after the United States and Europe imposed safeguard duties in the past one year. There will be some result reactions too, to keep the markets in action.

The US markets ended higher on Friday after a series of strong bank earnings, led by JPMorgan, boosted confidence in the US economy. Asian markets are trading in green on Monday as risk appetite was whetted by better-than-expected data from China that helped boost confidence about the health of the world economy.

Back home, last hour buying helped Indian equity benchmarks to end the Friday’s trading session on higher note, with Sensex and Nifty garnering gains of around 0.40% each. The start of the day was positive, amid reports that the Reserve Bank of India (RBI) has injected a total liquidity of Rs 2.98 lakh crore in the market in 2018-19. The First Bi-monthly Monetary Policy Statement, 2019-20 stated that 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. But, key indices turned volatile during middle of session, with a private report stating 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, markets erased all of their losses in last hour of the trade to settle in green terrain, following firm European markets. Traders took encouragement with the RBI’s data showing that that banks closed fiscal 2018-19 (FY19) with robust disbursals. The data showed that bank credit rose 13.24% to Rs 97.67 lakh crore for the fortnight to March 29, while deposits grew by 10.03% to Rs 125.72 lakh crore during the same period. This is the second consecutive double-digits credit growth after the same had declined to 4.54% in FY17 at Rs 78.41 lakh crore, which was the lowest since 1963. Some relief also came after the Ministry of Rural Development made recommendations to the Finance Commission to foster higher inclusive growth, equity, efficiency and transparency. The Ministry made a case for additional resources for Rural India. Finally, the BSE Sensex gained 160.10 points or 0.41% to 38,767.11, while the CNX Nifty was up by 46.75 points or 0.40% to 11,643.45.