Benchmarks likely to get positive start on Friday

Indian markets ended higher for second straight session on Thursday led by gains in banking, auto and metal shares. Today, the start of session is likely to be positive following firm global cues. Some support will come with Union Minister Rao Inderjit Singh’s statement that Indian economy is resilient and there is no cause for apprehension on decline in GDP with a slew of steps directed at boosting it. He added that the government has been undertaking various measures to boost GDP growth. However, weak macro-economic data may put pressure on sentiments. The National Statistical Office (NSO) data stated that industrial production shrank for third consecutive month in October by 3.8 per cent, mainly due to output fall in manufacturing, mining and electricity sectors, showing signs of economic slowdown. Besides, rising food prices pushed the retail inflation in November to over three-year high of 5.54 per cent, on the back of costlier vegetables, pulses and protein rich items. Also, there may be some concern as S&P Global Ratings forecast India’s 2019-20 gross domestic product (GDP) to grow at 5.1 per cent and warned of a rating downgrade if an economic recovery does not happen. Meanwhile, the government may impose anti-dumping duty on a chemical used in polyester fibres and films, imported from five countries as the commerce ministry has launched an investigation for the same. There will be some buzz in the telecom stocks as ratings firm ICRA maintained a negative outlook for the Indian telecom industry, saying that recovery measures by beleaguered telcos will not be able to sustain the massive blow dealt by the Supreme Court order on adjusted gross revenue (AGR). Auto stocks will be in focus with report that the domestic electric vehicle (EV) market is projected to grow 36 percent annually between 2019 and 2026 as the market has gained traction following the implementation of the second phase of the EV incentives scheme in April. Also, there will be some reaction in textile stocks with report hat India’s cotton yarn production is expected to remain largely stable at current levels and increase only marginally about 1.5-2.5% to reach 4,200-4,250 million kilogram (mkg) in FY20, despite high prices of the fibre and subdued demand.

The US markets ended in green on Thursday on reports that the United States and China reached a tentative trade deal. Asian markets are trading higher on Friday amid reports that US and Chinese negotiators have agreed in principle to an initial phase one trade deal.

Back home, rally continued on the Dalal Street for the second straight day on Thursday. The start of the day was fabulous, as the Union Cabinet approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company. The amendments to the Insolvency and Bankruptcy Code are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business. Firm trade persisted during the whole day, also because of positive cues from global markets. Key equity indices traded at their intraday fresh highs in the second half of the trading session, taking support with Former President Pranab Mukherjee’s statement that ‘certain things’ that are happening would have its impact and he was not worried over the economic slowdown. Mukherjee, further said there is nothing wrong in public sector banks needing capital infusion. Market participants remained optimistic ahead of GST Council meeting, headed by Finance Minister Nirmala Sitharaman, which is schedule on December 18 in the backdrop of lower-than-expected GST collection and pending compensation to many states. Finally, the BSE Sensex gained 169.14 points or 0.42% to 40,581.71, while the CNX Nifty was up by 61.65 points or 0.52% to 11,971.80.