Benchmarks likely to make positive start on Tuesday

Indian markets ended with solid gains of over 2 percent each on Monday after government rolled back the enhanced surcharge on foreign portfolio investors and unveiled a slew of measures to boost the economy. Today, the markets are likely to make a positive start mirroring firm cues from global markets. Traders will be taking encouragement with Chief Economic Advisor Krishnamurthy Subramanian’s statement that the ongoing trade war between the United States of America and China will not have any impact on Indian export which is just below 2 per cent of the global trade. He also said that the slew of measures announced by the Centre for the revival of muted growth in the economy was in the right direction, though it was necessary to focus on the structural reforms. Some support will also come as the Reserve Bank of India (RBI) decided to transfer a record Rs 1,23,414 crore of its surplus to the central government for the fiscal year 2018-19 or FY19 (July to June), and an additional Rs 52,637 crore of excess provisions as recommended by the Bimal Jalan committee on Economic Capital Framework (ECF). Traders may take note of Ficci Economic Outlook Survey stating that India's economy will grow at a median rate of 6% during the Q1FY20. Also, it pegged the annual median GDP growth forecast for 2019-20 at 6.9%, with a minimum and maximum estimate of 6.7% and 7.2%, respectively. Meanwhile, the finance ministry has said the last date for filing annual GST returns has been extended by three months to November 30 as taxpayers were facing technical problems in furnishing returns. Earlier, GST taxpayers were to file required returns by August 31. There will be some buzz in the banking stocks with rating agency Moody's statement that the government's announcement of an upfront capital infusion of Rs 70,000 crore in public sector banks (PSBs) will enable them to grow loans by around 13-15% in the fiscal year ending March 2020 and will also allow them to meet the final Basel III capital requirements. There will be some reaction in steel stocks with ICRA’s report that the demand for steel in India could grow at the slowest pace in three years as an economic slowdown in the global industry’s bright spot deepens. Oil and gas sector stocks will be in focus as Petroleum minister Dharmendra Pradhan said that the country’s oil and gas sector is at present seeing investments worth around Rs 5 trillion in exploration, distribution, marketing, regasification, pipeline network laying.

The US markets ended higher on Monday after President Trump said China wants to reach a trade agreement, signaling a potential de-escalation in tensions between the world’s two largest economies. Asian markets are trading in green on Tuesday amid easing signs of Sino-US trade dispute.

Back home, Indian equity benchmarks logged strong gains on Monday, with both the larger peers, Sensex and Nifty, closing higher by over 2%. After a positive start, markets slipped in red terrain for a small period, as Moody's Investors Service in its latest report revised downwards India's Gross domestic product (GDP) growth forecast to 6.2% for 2019 calendar year. The GDP growth forecast for current year was revised downwards from its previous estimation of 6.8%. But soon, key indices gained traction, aided by Finance Minister Nirmala Sitharaman’s statement the India's Gross Domestic Product continues to grow at a faster pace than the global economy and any other major economy. She said reform is a continuous process for her government and it tops the agenda. Bulls hold their grip on markets in the second half of the session, as the Reserve Bank of India (RBI) Governor Shaktikanta Das said that the RBI will continue to unlock entrepreneurial energies and set the country firmly on track to become $5 trillion economy in the next five years. Adding more confident among traders, former president Pranab Mukherjee said the government's ambitious target of becoming a $ 5 trillion economy by 2024-25 is possible through prudent fiscal management. Some support also came with industry body, Confederation of Indian Industry’s (CII) statement that the multi-sectoral and multi-dimensional policy stimulus announced by the government will have significant impact, imparting stability and underpinning a new growth impetus for India. Finally, the BSE Sensex gained 792.96 points or 2.16% to 37,494.12, while the CNX Nifty was up by 228.50 points or 2.11% to 11,057.85.