Benchmarks likely to make flat-to-positive start

Indian markets continued their bulls run and ended at a record close for the third straight session led by auto, IT, and FMCG sectors. Today, the markets are likely to get flat-to-positive start tracking global markets. Traders will be getting some support as DPIIT Secretary Guruprasad Mohapatra expressed optimism that India will soon break into the top 50 in the World Bank's ease of doing business ranking. Traders may take note of report that after the minutes of the Monetary Policy Committee (MPC) meeting was released, rating agency Care Ratings said it is expecting another 25 basis points rate cut in February itself. However, there will be some cautiousness with Union Rural Development Minister Narendra Singh Tomar’s statement that the dream of India becoming a 5 trillion dollar economy cannot be achieved if the villages in the country are ignored. Also, a private report indicated that industry fears that the Goods and Services Tax (GST) Council’s decision to further restrict input tax credit (ITC) on invoices not uploaded in the relevant form would block the cash flow of businesses, at a time when they’re struggling on finances due to economic slowdown. Meanwhile, trade unions urged the government to provide a minimum wage of Rs 21,000, a minimum pension of Rs 6,000 under Employees' Pension Scheme and tax exemption on an annual income of up to Rs 10 lakh. There will be some buzz in the textile stocks as the government said the new Textiles Policy 2020 being formulated by the Centre is aimed at developing in the country a competitive textile sector which is modern, sustainable and inclusive. Aviation stocks will be in focus with rating agency ICRA’s report that domestic passenger traffic growth is expected to decline to a six-year low of 4.5 percent in the current fiscal and the financial health of the aviation industry will continue to deteriorate. There will be some reaction in insurance stocks with report that life insurers have sought 100 percent foreign direct investment (FDI) limit for the sector through the automatic route, which can help the sector attract capital of Rs 40,000-60,000 crore.

The US markets settled at all-time highs on Thursday as investors looked past the news of President Donald Trump's impeachment by the House as well as mixed US economic data. Asian markets are trading mostly higher on Friday following gains on Wall Street.

Back home, Dalal Street extended record setting rally on Thursday’s trading session, with the Sensex and the Nifty ending around 0.30% higher each. The start of the day was lackluster, impacted with former Chief Economic Adviser Arvind Subramanian’s statement that India is facing a Great Slowdown with its economy headed for intensive care unit primarily due to a second wave of the twin balance sheet crisis at banks. Sentiments also got hit with reports that most of the states opposed a change in slabs or hike in GST during the crucial GST Council meeting, arguing an increase in the levies would have adverse implications for the economy facing a slowdown. In noon deals, bourses staged sharp recovery to hit fresh record highs, taking support with NASSCOM President, Debjani Ghosh’s statement that technology startups alone have created 60,000 direct jobs this year and overall the IT sector will be a positive hirer in the current financial year. Sentiments also remained positive, as Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman held her 5th Pre-Budget Consultation with the representatives of various Trade Unions and Labour Organisations in connection with the forthcoming General Budget 2020-21. Discussions were held on skilling, re-skilling and up-skilling of existing labour force. Quality of job creation and ensuring minimum wages of workers were also discussed. Finally, the BSE Sensex gained 115.35 points or 0.28% to 41,673.92, while the CNX Nifty was up by 38.05 points or 0.31% to 12,259.70.