Markets to open marginally in red on Tuesday

Indian markets, before going for long weekend, posted strong gains of over 0.60% each on Friday and extended their gains to sixth straight session as Finance Minister Nirmala Sitharaman indicated further stimulus in FY20. Markets remain closed on Monday on account of assembly elections in Maharashtra and Haryana. Today, the start is likely to be marginally in red. There will be some cautiousness with Finance Minister Nirmala Sitharaman’s statement that the ongoing trade wars and protectionism have generated uncertainties and will ultimately impact the flow of capital, goods and services. Meanwhile, regulator SEBI has put in place stricter norms for auditors, including prompt disclosures about reasons for their resignation and requirement to approach chairman of audit committee directly in case of any concerns with the management of the firm concerned. However, some respite may come later in the day following positive leads from Asian peers. Traders may take some encouragement as the International Monetary Fund supported India's recent decision to reduce corporate income tax, saying it has a positive impact on investment. Some support may also come with reprot that the commerce ministry is considering rationalising and simplifying certain export promotion schemes such as EPCG in the next foreign trade policy, which provides guideline and incentives for increasing shipments. Besides, a report showed that emerging investment instruments -- REITs and InvITs -- seem to be finally catching on with investors as mutual funds have invested nearly Rs 9,000 crore in such units in the first nine months of the year. Non-banking finance companies (NBFCs) stocks will be in focus with rating agency ICRA’s report that NBFCs have stepped up securitisation of their loan portfolios in the last one year, raising as much as Rs 2.36 lakh crore since the IL&FS crisis in September 2018. There will be some reaction in sugar stocks with report that with the next sugarcane crushing season slated to begin after Diwali, the sugar exports have largely remained muted on global sugar glut and low prices in the international market. There will be lots of earnings reaction based on the performance of the companies.

The US markets settled higher on Monday, boosted by optimism around US-China trade talks as well as the corporate earnings season. Asian markets are trading mostly in green on Tuesday amid cheery chatter about the chance of a Sino-US trade deal.

Back home, Indian equity benchmarks took winning spree to 6th day on Friday, with both the larger peers, Sensex and Nifty, closing higher by around 0.65% each. Key indices made a negative start of the day but soon turned positive, taking support with Union Finance Minister Nirmala Sitharaman’s statement that investors can find no better place in the world than India that has a democracy loving and capitalist respecting environment. She added that the government was continuously working to bring reforms. Domestic sentiments remained enthusiastic with a private report stating that India has emerged as third largest ecosystems for more successful start-ups right behind China and US but ahead of Britain and Israel. Bourses hold their strong gains throughout the day to settle higher, despite weak cues from global markets. Market participants got comfort, with a private report stating that corporate tax rate cut is clearly a positive for India which would move the country up the ladder in terms of attractiveness for foreign direct investment. Separately, recognizing the role of innovation as a key driver of growth and prosperity for India, NITI Aayog with Institute for Competitiveness as the knowledge partner has released the India Innovation Index (III) 2019. Karnataka, Tamil Nadu, Maharashtra, Telangana and Haryana have been ranked as top five most innovative major states in NITI Aayog's first Innovation Index. Finally, the BSE Sensex gained 246.32 points or 0.63% to 39,298.38, while the CNX Nifty was up by 75.50 points or 0.65% to 11,661.85.