Markets likely to open marginally in green on Wednesday

Indian markets snapped nine-day losing streak on Tuesday and staged smart recovery in late hours of trade on the back of easing wholesale price index (WPI). India’s WPI inflation eased to 3.07% in the month of April 2019, as compared to 3.18% in March and 3.62% during the corresponding month of the previous year. The inflation softens mainly due to cheaper fuel prices, even as prices of food articles remained high. Today, the start is likely to be marginally in green following positive global cues amid easing trade worries. Some support will come with rating agency Crisil’s report that recovery of stressed assets through the Insolvency and Bankruptcy Code (IBC) was two-times at Rs 70,000 crore compared to that through other mechanisms in 2018-19 but resolution timelines for bad loans still remains an issue. Traders may take note of SBI Research report stating that the RBI needs to go in for a larger rate cut, more than 25 basis points, in the next monetary policy review in June to reverse the current slowdown in the economy. However, there may be some cautiousness with a report that dampening prospects of higher farm and economic growth in the $2.6 trillion economy, monsoon rains are expected to hit Kerala coast on June 4 and deliver less rainfall than average in 2019. It added that the country is likely to receive 93% rainfall of the long period average. Meanwhile, the income tax department has deferred for the second time the requirement for companies to include in their tax audit report the details of Goods and Services Tax (GST) and GAAR. Besides, India is expected to again extend the deadline by a month to impose retaliatory import duties on 29 US products, including almond, walnut and pulses. There will be some buzz in the steel industry stocks with report that India fears China could soon start flooding excess steel into its market after the United States raised tariffs on Chinese products due to the escalating trade war between the world's two largest economies. There will be lots of important earnings announcements also, to keep the markets in action.

The US markets ended higher on Tuesday after President Trump further signaled that US and Chinese officials could still strike a trade deal. Asian markets are trading mostly in green on Wednesday following gains on Wall Street.

Back home, bulls took late charge on Dalal Street on Tuesday and markets snapped their nine days losing streak, with Sensex and Nifty closing with gains of more than half a percent each. The Indian benchmarks made a soft opening, as traders remained pessimistic about the Central Statistics Office (CSO) data showing that retail inflation inched up to a six-month high of 2.92% in April due to a spike in food prices, including vegetables, meat, fish and eggs. Inflation based on the Consumer Price Index (CPI) was at 2.86% in the previous month and 4.58% in April 2018. The rate of price rise in April is the highest since October 2018 when the rate was 3.38%. Traders remained cautious with Moody's Investors Service’s statement that India’s rising oil consumption will support its investments in refining capacity additions and upstream production, but imports will keep growing amid stagnant production. The country's dependence on imported crude oil to meet its needs has risen to 83.7% in 2018-19 fiscal year from 82.9% in 2017-18. Import dependence was 80.6% in 2015-16. Markets recouped losses in last leg of trade and get back to their positive trajectory, as traders took some support with data showing that wholesale price inflation (WPI) for the month of April eased to 3.07 percent compared to 3.18 percent in March led by fall in prices of manufacturing products. Local investors also cheered with Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian’s statement that the Indian economy will grow at 7% range in the current fiscal powered by the effects of the strong structural reforms such as bankruptcy laws, Goods and Services Tax (GST), crackdown on shell companies and the fiscal prudence undertaken in the last five years. Indices gave up some of their gains in dying hour of trade, as some cautious came with a private report that India saw the largest migration of its high net worth individuals in 2018 after China and Russian Federation. India failed in creating a suitable environment for millionaires to stay back in the country which claims to be the fastest growing economy in the world. Finally, the BSE Sensex gained 227.71 points or 0.61% to 37,318.53, while the CNX Nifty was up by 73.85 points or 0.66% to 11,222.05.