Benchmarks likely to make slightly positive start

Indian markets extended their northward journey for third straight session on Monday following firm global cues and buying in blue-chip counters such as Tata Motors, TCS and Coal India. Today, the markets are likely to make slightly positive start tracking optimistic monsoon forecast and good trade data. The India Meteorological Department (IMD) has said that the country is likely to have near normal monsoon this year with a well distributed rainfall which could be beneficial for the agriculture sector. It added that the seasonal rainfall is likely to be 96% of the Long Period Average (LPA) with a model error of plus or minus 5%. It also said weak El Nino conditions are likely to prevail during the monsoon season with reduced intensity. Besides, the government data has showed that India's exports grew by 11% to $32.55 billion in March on account of higher growth in sectors including pharma, chemicals and engineering. Imports rose by 1.44% to $43.44 billion during the month. However, trade deficit narrows to $10.89 billion as compared to $13.51 billion in the same month last year. Some support will also come with a private report that the rise in banks’ profitability, thanks to a steady decline in dud assets, can give a 0.60% boost to Gross Domestic Product (GDP) in fiscal 2020. Meanwhile, Finance minister Arun Jaitley has said fast economic growth and rapid urbanisation would slash the number of people in extreme poverty by 2021 and end it completely in the decade after that. However, there may be some cautiousness amid subdued global cues. There will be some buzz in the agriculture related stocks with report that the government has decided to extend the duration of the New Urea Policy from April 1 this year till further orders to ensure smooth supply of nutrients to farmers. The extension of the policy would facilitate in continuation of operations of urea plants and ensure regular supply of urea to the farmers. There will be some reaction in textile industry stocks with report that India's cotton crop production may fall 7.87% to 343 lakh bales (of 170 kg each) in the 2018-19 season, mainly due to drought in many cotton-growing regions. There will be some earnings announcements too to keep the markets buzzing.

The US markets declined on Monday, weighed by losses in financial stocks as earnings from Wall Street's big banks Goldman Sachs and Citigroup failed to impress. Asian markets are trading mixed on Tuesday as US-Japan trade talks kicked off and the Bank of Japan chief flagged risks of increasing trade protectionism to the global economic growth outlook.

Back home, maintaining gaining momentum for third straight session, Indian equity bourses ended Monday’s trading session on cheerful note. The markets started the session with marginal gains, as India’s factory output, as measured in terms of the Index of Industrial Production (IIP), slowed down to 20-month low of 0.1% in February, mainly due to contraction in the manufacturing sector. It had grown by 6.9% in February 2018. Separately, India's retail inflation, measured in Consumer Price Index (CPI), continued rising trend for second straight month and increased marginally to 2.86% in March 2019 as compared to 2.57% in February 2019, on account of increase in prices of food articles and fuel. But, key indices managed to add gains during the session, aided by Former Niti Aayog vice chairman Arvind Panagariya’s statement that the Modi government has achieved 'major successes' in social sector programmes like Ayushmaan Bharat, PM-Kisan and rural electrification. Besides, he added that this government has made an 'unprecedented progress' in tackling corruption. Upward rally continued during second half of the session, on the back of heavy buying coupled with positive cues from other Asian markets. The street took support with a report stating that foreign investors have pumped in a net sum of Rs 11,096 crore into the Indian capital markets in April so far, driven by global and domestic factors. Foreign portfolio investors (FPI) were net buyers for the previous two months as well, infusing a net sum of Rs 11,182 crore in February and Rs 45,981 crore in March. Adding more comfort among traders, a private report showed that financing deals for Indian infrastructure projects are surging on market expectations that the next government will come through with at least some of the spending that politicians are promising now during a heated election campaign. The market participants overlooked rising WPI inflation data report in late noon deals. India’s Wholesale price index (WPI) inflation has come in at 3.18% in the month of March as compared to 2.93% (provisional) for the previous month. Finally, the BSE Sensex gained 138.73 points or 0.36% to 38,905.84, while the CNX Nifty was up by 46.90 points or 0.40% to 11,690.35.