Markets likely to open marginally in red on Monday

Indian markets ended higher on Friday led by gains in banking, telecom and metal stocks. Today, the start of session is likely to be marginally in red amid mixed cues from Asian peers and concern over economic growth. Economic think-tank NCAER said that the country's GDP growth is likely to decline to 4.9 per cent in the second quarter of this fiscal due to sustained slowdown in virtually all the sectors. Traders will be concerned with the government data showing that India’s exports dipped by 1.11 percent to $26.38 billion in October on account of contraction in sectors like petroleum and leather. Imports too declined by 16.31 percent to $37.39 billion, narrowing trade deficit to $11 billion in October. There will be some cautiousness with Finance Minister Nirmala Sitharaman’s statement that no welfare schemes will be curtailed despite low revenues and she expected GST numbers for November to be good. However, some support may come later in the day with report that FPIs pumped in a net sum of Rs 19,203 crore into the domestic capital markets in the first half of November amid encouraging domestic and global factors. Besides, as per the RBI’s data Foreign exchange reserves continued their upward march surging $1.710 billion to touch a new high of $447.81 billion in the week to November 8. Traders may take note of that in a bid to ease the flow of foreign funds into legitimate business activities, the government may soon ease restrictions on foreign direct investment (FDI) by joint ventures (JVs) or wholly-owned subsidiaries (WOS) of an Indian company without categorising such investments as suspect involving round tripping of funds. There will be some buzz in the MSME stocks with Union MSME and Road Transport Minister Nitin Gadkari’s statement that the government is working on two policies to increase MSME exports and bring down imports by encouraging local production. There will be some reaction in telecom stocks with Finance Minister Nirmala Sitharaman’s statement that the government intends to address the concerns of the crisis-ridden telecom companies which are facing billions of dollars of fresh statutory liability following a recent Supreme Court ruling.

The US markets ended higher on Friday as upbeat comments from the White House on trade talks buoyed investor optimism. Asian markets are trading mixed on Monday as jaded investors awaited real evidence on progress in the US-China trade dispute, though sentiments found support from another record close on Wall Street.

Back home, Indian equity benchmarks wiped out most of their intraday gains to end marginally in green on Friday, tracking a firm trend in global peers. Trading for the day began on a firm note, as traders took encouragement with report that even after the flurry of sops given to various industries after the budget, Union MSME Minister Nitin Gadkari has said the government will create a special financial scheme for 10 industry segments which are import-driven. He said the government has created a scheme to support industries where imports are high by providing special financial assistance. Traders also took note that in a relief to taxpayers, the government extended the due dates for filing GST annual returns for 2017-18 to December 31 and for the financial year 2018-19, to March 31 next year. The dates for filing the reconciliation statement has also been extended accordingly. In another relief, it has also decided to simplify the two GST forms by making various fields of these forms as optional. The market breadth remained optimistic with Prime Minister Narendra Modi’s statement that despite recession at the global level, BRICS countries accelerated economic growth, drove millions out of poverty and achieved new breakthroughs in technology and innovation. Adding some solace, Union Minister Pratap Chandra Sarangi said that the MSME sector plays a crucial role in achieving the Centre's target of making the country $5 trillion economy. He said the MSME sector is the largest employment generator after agriculture in the country. However, in dying hour of trade, key indices gave up most of their gains to come off their intraday high points, as market-men got anxious with SBI research report stating that surplus rainfall in August and September is likely to keep food and vegetable prices elevated going forward, and retail inflation may average at around 4 per cent in FY20. Finally, the BSE Sensex rose 70.21 points or 0.17% to 40,356.69, while the CNX Nifty was up by 23.35 points or 0.20% to 11,895.45.