Markets to get slightly positive start of new week

Indian markets ended volatile session almost flat on Friday with gains in Reliance Industries offsetting losses in other heavyweights HDFC, ICICI Bank and TCS. Today, the markets are likely to get slightly positive start following gains in global markets. Some encouragement will come with Union Road Transport and Highways Minister Nitin Gadkari’s statement that the goal of making India a $5 trillion economy by 2024 was difficult but not impossible. He added that it can be achieved by increasing domestic production and reducing dependence on imports. Some support will also come with report that the government is working vigorously on import substitution to promote micro, small and medium enterprises (MSMEs) and encourage local manufacturing. Traders may take note of report that the tax department raised GST collection target to Rs 1.15 lakh crore over the next two months and Rs 1.25 lakh crore for March month by checking fraudulent input tax credit claims. Besides, the Reserve Bank of India (RBI) data showed that the country's foreign exchange reserves rose by $58 million to reach a life-time high of $461.21 billion in the week to January 10. Though, there may be some cautiousness as CRISIL Research expects revenue growth of corporate India, excluding banking, financial services and insurance (BFSI) and oil companies, to decline 2-3 per cent on a year-on-year basis in the third quarter (Q3) of fiscal year 2019-20, mainly due to muted private consumption and a decline in revenues of industrial and construction-linked sectors. There will be some buzz in the auto stocks with the Society of Indian Automobile Manufacturers' (SIAM) data showing that Passenger vehicle (PV) exports from India increased by 5.89 percent in the first nine months of the current fiscal. PV exports stood at 5,40,384 units in the April-December period of the current fiscal as compared with 5,10,305 units in the same period of 2018-19. Insurance stocks will be in focus with a private report indicating that the non-life insurance sector reported a weak premium growth in December 2019 due to a slowdown in motor and fire business. There will be some reaction in sugar stocks with the Indian Sugar Mills Association’s (ISMA) statement that Indian mills produced 10.9 million tonnes of sugar between October 1 and January 15, down 26% from a year earlier, due to lower production in the drought-hit western state of Maharashtra. There will be lots of earnings reaction based on the performance of the companies.

The US markets closed higher on Friday amid strong global economic data and a solid start to the earnings season. Asian markets are trading mostly in green on Monday, with the People's Bank of China (PBoC) keeping the loan prime rate (LPR) unchanged.

Back home, Indian equity bourses ended volatile session on flat note on Friday. The start of the day was on cautious note, as United Nations World Economic Situation and Prospects (WESP) 2020 report lowered its GDP growth estimate for India to 5.7 percent in the current fiscal (from 7.6 percent forecast in WESP 2019) and lowered its forecast for the next fiscal to 6.6 percent (from 7.4 percent earlier). But soon, indices staged sharp gains, aided with NITI Aayog member Ramesh Chand’s statement that farm sector growth is likely to be higher at 3.1 per cent in the current fiscal compared with 2.9 per cent in 2018-19. Despite high volatility on the street, key benchmarks traded in green for the most part of the session, amid reports that the Reserve Bank of India (RBI) decided to conduct simultaneous purchase and sale of government securities (G-Secs) under Open Market Operations (OMO) for Rs 10,000 crore each on January 23, 2020, in wake of the current liquidity and market situation and an assessment of the evolving financial conditions. Some relief also came with a private report stating that India attracted tech investments worth $9.36 billion last year, a 95 per cent increase compared with the previous year. Finally, the BSE Sensex rose 12.81 points or 0.03% to 41,945.37, while the CNX Nifty was down by 3.15 points or 0.03% to 12,352.35.