Markets to open in green terrain; CPI data eyed

Indian markets ended higher for second straight session on Friday as the sentiment turned positive on strong buzz that the government may axe higher foreign portfolio investment (FPI) tax. Markets remain closed on Monday on account of Bakrid. Today, the start of the truncated week is likely to be in green as investors looking for the development over expected measures to revive economy as well as the roll-back of super-rich tax. Traders will also be looking to the macroeconomic data including CPI inflation and balance of trade for the month of July to be release later in the day. Some support will come with report that the government is working on a set of measures to remove friction points in the economy with a view to ensuring easy availability of funds to productive sectors and stimulate overall growth. Besides, the government is working on a proposal to allow 100 percent FDI in contract manufacturing with a view to attract overseas investments. According to the existing foreign investment policy, 100 percent foreign direct investment (FDI) is permitted in the manufacturing sector under the automatic route. However, some cautiousness may come in amid weakness in global markets. There may be some concern with report that continuing with their selling spree, foreign investors pulled out a net amount of Rs 9,197 crore in just seven trading sessions in August due to unconducive domestic and global factors. According to latest depositories data, foreign portfolio investors (FPIs) withdrew a net amount of Rs 11,134.60 from equities while pumping in Rs 1,937.54 into the debt segment during August 1-9, taking the total net withdrawal to Rs 9,197.06 crore. Meanwhile, SEBI has said investment provisions for domestic Alternative Investment Funds (AIFs) will also be applicable for such entities operating in international financial services centre (IFSC). There will be some buzz in the power stocks with report that average spot power price is likely to be around Rs 3.40 per unit in August on account of higher supplies especially from hydro and wind energy segments. Also, coal stocks will be in focus with report that the country's coal imports increased by 28.7 percent to 24.14 million tonnes in June on the back of softening of non-coking coal prices in the international markets.

The US markets declined on Monday, dragged down by financial shares, as investors fled riskier assets on fears that a drawn-out trade war between the US and China could force the global economy into recession. Asian markets are trading in red on Tuesday amid fears about a drawn out Sino-US trade war, protests in Hong Kong.

Back home, extending previous session’s strong gains, Indian equity indices closed the Friday’s session on a positive note. Markets made an optimistic start of the day, amid reports that the government is likely to withdraw higher surcharge on foreign portfolio investors (FPIs). In this regard, Finance minister Nirmala Sitharaman will meet market participants, including senior officials of foreign portfolio investors and mutual funds, later in the day to ascertain views on current issues relating to financial markets. Some support also came after India Inc said the government has assured to take action soon to revive the industry and push economic growth, which is showing signs of a slowdown. Finance Minister Nirmala Sitharaman & ministry officials met captains of the industry to deliberate upon the issues about the economy and sagging industrial growth. Sentiments remained positive, as Agriculture Minister Narendra Singh Tomar said that the deficit in southwest monsoon has narrowed and the sowing of summer (Kharif) crops is progressing well across the country. Firm trade persisted during the whole day, supported by report that the Confederation of All India Traders (CAIT) launched an initiative Digi Vyapari-Safal Vyapari, to accelerate acceptance of digital payments among merchants across the country. For this initiative, CAIT partnered with HDFC Bank, Mastercard, Common Service Centres (CSCs) of Ministry of Electronics and Information Technology (Meity) and Global Linkers. The street paid no heed towards Ind-Ra’s latest report stating that the huge Rs 3 trillion capital infusion by the government into Public Sector Banks (PSBs) between FY14 and FY19 has helped them cut losses but has failed to contribute meaningfully to credit growth. Finally, the BSE Sensex gained 254.55 points or 0.68% to 37,581.91, while the CNX Nifty was up by 77.20 points or 0.70% to 11,109.65.