Benchmarks likely to make slightly positive start

Indian markets ended volatile session in red on Thursday mainly due to late hour selling led by auto and IT sectors. Today, the start of session is slightly in green following firm global cues coupled with robust industrial output data. The Central Statistics Office’s data showed that India's industrial output rose 4.3 percent in July, as against 1.2 percent in June. Some support will come with Union Minister of Commerce & Industry and Railways Piyush Goyal’s statement that government will soon be coming out with a credit scheme for exporters with enhanced insurance cover upto 90 percent instead of the present 60 percent. Traders may take note of report that the government clarified that no licence would be required for the manufacture of goods except tobacco items, defence equipment, hazardous chemicals and industrial explosives. However, there may be some concern with government data showing that consumer price index-based inflation (CPI) for August crept up slightly to 3.21 per cent year-on-year, compared with 3.15 per cent in July, driven by a sharp rise in food prices. Also, there may be some cautiousness with the International Monetary Fund’s (IMF) statement that India's economic growth is much weaker than expected, attributing the reasons for corporate and environmental regulatory uncertainty and lingering weaknesses in some non-bank financial companies. Meanwhile, SEBI has asked listed companies to settle their outstanding dues to the capital markets regulator, bourses and depositories before filing schemes of arrangement such as mergers and demergers with the exchanges. There will be some buzz in the aviation stocks with ICRA’s report that India's domestic air passenger demand plummet to 1.8 per cent in July following the end of tourist season while the cumulative growth in traffic in the first four months stood at a mere 1.6 per cent. Banking stocks will be in focus with RBI’s data showing that bank credit and deposits growth slowed to 10.24 per cent and 9.73 per cent to Rs 96.80 trillion and Rs 127.80 trillion , respectively, in the fortnight to August 30.

The US markets ended higher on Thursday after the European Central Bank announced new stimulus measures and as investors greeted further signs of moderation in the US-China trade war. Asian markets are trading in green on Friday after US President Donald Trump signaled that he would consider an interim trade deal with China, though it would not be preferred.

Back home, Indian equity benchmarks failed to hold their gains on Thursday to end in red terrain. After a firm start, markets managed to trade above neutral lines for the most part of the session, as Union minister Ravi Shankar Prasad termed the low Gross Domestic Product growth as a temporary phenomenon, and expressed confidence that things will improve in future as the fundamentals of Indian economy are strong. He added that the government is taking all necessary steps to boost the economy. Adding some comfort, data from the India Meteorological Department showed India received 38% more rainfall than the 50-year average in the week to September 11, with central India receiving 142% more rain. However, in the last hours of the trade, indices slipped in negative, as Organization of the Petroleum Exporting Countries (OPEC) said that it seems India's economic slowdown could continue for the next two to three years as the economy faces serious structural reform, which will hurt consumer demand and manufacturing. Some worries also came with rating agency Moody's statement that Indian non-banking financial companies (NBFCs) and housing finance companies (HFCs) are pulling back on loan against property (LAP) lending to micro, small and medium sized enterprises (MSMEs) because of the funding squeeze caused by the liquidity crisis in the country's financial sector. Finally, the BSE Sensex fell 166.54 points or 0.45% to 37,104.28, while the CNX Nifty was down by 52.90 points or 0.48% to 10,982.80.