Markets likely to make positive start of new week

Indian markets snapped tow-day losing streak and ended highly volatile session in green with marginal gains on Friday tracking mixed domestic and global cues. Today, the start of new week is likely to be positive, tacking supportive global cues after the US and Mexico agreed to end their trade dispute. Investors will be looking ahead for key inflation and manufacturing data due to be released later in the week. Traders will be getting some encouragement with report that foreign investors have pumped in a net amount of Rs 7,095 crore into the Indian capital markets during the first week of June in anticipation of continued policy reforms. There will be some support with Trade Promotion Council of India’s (TPCI) statement that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit with a view to boost exports. Traders may take note of report that India pitched for promoting micro, small and medium enterprises (MSMEs) in developing countries as they are important for employment and income generation. Meanwhile, the finance ministry is likely to propose Rs 50 crore as the turnover threshold for entities to generate e-invoice on a centralised government portal for business-to-business (B2B) sales as it looks to curb GST evasion. However, there may be some cautiousness with the India Meteorological Department’s (IMD) statement that a delay in the arrival of monsoon has pushed the country’s rainfall deficiency in the first nine days of June to 45 per cent. Monsoon made an onset over Kerala on June 8, a week after its normal arrival date. There will be some buzz in the aviation stocks with the International Air Transport Association’s (IATA) chief Alexandre de Juniac’s statement that high costs, adverse conditions such as fluctuation in rupee against the US dollar and strong competition were putting pressure on the profitability of airlines. There will be some reaction in power stocks as Power and New and Renewable Energy Minister Raj Kumar Singh exuded confidence that the renewable energy target of 175 gigawatt (GW) by 2022 would be achieved.

The US markets ended higher on Friday as a disappointing jobs report for May raised investors' hopes that the Federal Reserve would cut interest rates. Asian markets are trading in green on Monday following signs of a reprieve in global trade tensions and the likelihood of lower US interest rates.

Back home, Indian equity benchmarks ended volatile session with marginal gains on Friday, with Sensex and Nifty settling above their crucial psychological levels of 39,600 and 11,850, respectively. After a cautious start, key indices swung between green and red terrain, with the India Meteorological Department’s (IMD) statement that the arrival of the monsoon in the national capital is likely to be delayed by two-three days, though the city is expected to receive normal rainfall. It said normally, the monsoon reaches Delhi by June 29. Since there is a delay in its onset in the southern peninsula, the wind system is likely to take two-three days longer to reach northwest India. Traders got anxious, amid a private report stating that marked slowdown in Asia’s third-largest economy pushed growth concerns to the top of the Reserve Bank of India’s (RBI’s) agenda, suggesting more policy easing will follow its third interest-rate cut of the year. In the last leg of trade, markets staged recovery to settle the day above their neutral lines, tracking firm global markets. The street got relief with Commerce and Industry minister Piyush Goyal’s statement that the repo rate cut by the RBI will help boost India's economy by making loans affordable to MSMEs, exporters and home buyers. He also added that removal of charges on NEFT and RTGS transactions will bring great relief to the people and will help in promoting Digital India initiative. Adding some comfort, industry chambers hailed the RBI's decision to cut lending rate by 0.25 per cent as a welcome step to boost demand and revive economy. Traders took a note of the RBI governor Shaktikanta Das’ statement that the RBI expects the government to continue to be broadly prudent on the fiscal side. Finally, the BSE Sensex gained 86.18 points or 0.22% to 39,615.90, while the CNX Nifty was up by 26.90 points or 0.23% to 11,870.65.