Benchmarks to start on positive note on supportive global cues

Indian markets remained volatile throughout the trading session and ended flat on Thursday.  Today, the start of the session is likely to be in green on positive global cues. Traders will be getting support with union minister of state for heavy industries and public enterprises, Arjun Ram Meghwal’s statement that the government will do everything to ensure that the economy remains on track and is not weakened so that the country reaches its target of $5 trillion economy. He also said during the tenure of the UPA government the country's economy was ranked 11th in the world and now under the BJP-led NDA government it has climbed to the fifth position. He added ‘our target is the third position. So we cannot afford to allow the economic growth to be weakened.’ Meanwhile, to revive sagging economy, the finance ministry will hold meeting with heads of central public sector enterprises (CPSEs) today to impress upon them the need to expedite capital expenditure. The government has a capital expenditure plan of Rs 3.3 lakh crore during the current financial year. These include expenditure by the Ministry of Railways and Road Transport. However, there will be some cautiousness latter in the day on report that CARE Ratings revised India’s GDP growth forecast on account of subdued growth in the industrial sector and weakness in the agricultural sector during Q1FY20. The agency cut the GDP estimate downward from 6.7-6.8% earlier to 6.4-6.5% for FY20 with the underlying GVA growth of 6.3-6.4%.  The MSME sector will be in action on report that the government launched the updated Credit linked Capital Subsidy Scheme (CLCSS) to allow micro, small and medium enterprises (MSMEs) access to capital. The scheme provides an upfront subsidy of 15 per cent on institutional credit up to Rs 1 crore for MSMEs in the specified 51 sub-sectors. There will be some buzz in the sugar stocks on report that sugar exports, estimated at 3.8 MT for sugar season (SS 2019), are expected to rise to 4.5-5 MT in SS 2020.

Asian markets are trading in green in early deals on Friday as investors cheered plans for more trade negotiations between Washington and Beijing. The US markets ended higher on Thursday on expectations of de-escalation in US-China trade tensions, while strong US economic data eased fears of a domestic slowdown.

Back home, Indian equity bourses gave up their gains on Thursday to end the session flat. After a positive start, the markets traded firmly during morning deals, as the government data showed that foreign direct investment into India grew by 28 per cent to $16.33 billion during the first quarter of the current fiscal. Inflow of FDI during April-June of 2018-19 stood at $12.75 billion. Some support also came with reports that a top advisory body on external trade will meet next week to discuss issues related to export promotion, domestic manufacturing and competitiveness in the wake of a fall in exports of traditional, employment-generating sectors such as gems and jewellery, leather, handloom and cotton yarn and fabrics. But in noon deals, key indices erased gains, as India Ratings and Research (Ind-Ra) believes India’s increased dependence on foreign portfolio investment (FPI) makes the country highly vulnerable to global shocks. The surplus generated in the services trade combined with remittances is insufficient to cover India’s trade deficit. Adding anxiety among market participants, domestic credit rating agency CRISIL cut India’s current financial year (FY20) Gross domestic products (GDP) growth forecast to 6.3% from its earlier forecast of 6.9%. The agency said that lower GDP growth forecast corroborates that India’s economic slowdown is deeper and more broad-based than suspected. Finally, the BSE Sensex lost 80.32 points or 0.22% to 36,644.42, while the CNX Nifty was up by 3.25 points or 0.03% to 10847.90.