Markets likely to make positive start of new week

Indian markets ended marginally higher on Friday after a volatile session as markets consolidated after scaling new highs. Today, the markets are likely to make positive start of new week following firm cues from Asian peers. Traders will be getting some encouragement with report that continuing their buying streak for the second straight month, overseas investors pumped in a net Rs 16,464 crore into the Indian capital markets in October amid positive domestic and global cues. Also, the Reserve Bank of India’s (RBI) data showed that India's forex reserves increased by $1.832 billion to a new lifetime high of $442.583 billion in the week ended October 25, helped by a jump in core currency assets and value of gold. Some support will also come with report that highlighting India's economic growth, Prime Minister Narendra Modi said the country is among the top 10 destinations for foreign direct investment (FDI) in the world and had received $286 billion of FDI in the last five years. Traders may take note of the International Monetary Fund’s (IMF) statement that led by India, South Asia is moving towards becoming center of global growth and could contribute about one-third of the world’s growth by 2040. However, there may be some cautiousness with report that in more financial worries for the government, the Goods and Services Tax (GST) collection dropped 5.29% to Rs 95,380 crore in the month of October 2019, on year-on-year basis. Traders may be concerned with the Organisation for Economic Co-operation and Development’s (OECD) statement that India’s gross domestic product (GDP) could grow 6.6% in 2020-24, lower than its 2013-17 average of 7.4%. Besides, data from the Centre for Monitoring Indian Economy (CMIE) showing that the unemployment rate in India rose to a three-year high of 8.5% in October, with rural joblessness pushing it up, while urban joblessness rate was 8.9%, in villages it stood at 8.3%. Meanwhile, the finance ministry has said it was committed to following a glide path to reduce fiscal deficit notwithstanding slowdown in the economy impacting revenue collections. There will be some reaction in power stocks with report that power producers' total outstanding dues owed by distribution companies rose around 37% to Rs 69,558 crore in September 2019 over the same month last year, reflecting stress in the sector. Coal stocks will be in focus with data showing that India’s coal imports increased by 9.3% to 126.91 million tonnes (MT) in the first six months of the ongoing fiscal.

The US markets ended in green on Friday after the government’s October employment report showed better-than-expected job growth. Asian markets are trading higher on Monday as growing optimism over US-China trade talks and upbeat US job data boosted global investors' appetite for riskier assets.

Back home, Indian equity benchmarks managed to end Friday’s trading session above their respective neutral lines. The start of the day was slightly higher, taking support with State Bank of India’s report that credit growth in the system has picked up rapid pace beginning September 2019 after lagging behind for several months in a row, on the back of demand from housing, non-banking financial companies and micro, small and medium enterprises sectors. But soon, indices turned volatile, after the growth of eight core infrastructure industries contracted massively by 5.2% in September 2019, as compared to same period of last year, due to a decline in output of coal, crude oil, natural gas, cement, & electricity. Lackluster trade persisted throughout the day, as India's manufacturing activity also slowed down in the month of October. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slipped to a two-year low of 50.6 in October from 51.4 in September. Benchmarks ended in green terrain but gains remained capped, as the Controller General of Accounts (CGA) in its latest data has showed that India's fiscal deficit reached nearly 93% of the Budget Estimate (BE) at Rs 6.52 lakh crore in the first half (April-September) of the current fiscal year (2019-20). Finally, the BSE Sensex gained 35.98 points or 0.09% to 40,165.03, while the CNX Nifty was up by 13.15 points or 0.11% to 11,890.60.