Indian markets likely to open slightly in green

Indian equity markets traded superbly to end with a massive gain on Tuesday supported by buying in heavyweights. Today, the start of session is likely to be positive on firm global cues. Traders will be taking encouragement. With the Department of Economic Affairs in its the monthly macroeconomic report stating the worst may now be over for India and the road ahead will take the economy back on the track.  It added that Indicators such as Index of Industrial Production (IIP), Purchasing Managers Index (PMI), power generation, production of steel and cement, railway freight, traffic at major ports, air cargo and passenger traffic, e-way bill generation capturing the inter-state movement of goods, consumption of petroleum products, and motor vehicle registration, have shown improvements. However, traders may remain concern on ICRA’s report where it mentioned that the securitisation volumes are estimated to significantly drop to Rs 1.2-1.3 lakh crore during the current fiscal due to the impact of COVID-19 and lower availability of eligible loan pools for securitisation. The securitisation volumes in 2019-20 were around Rs 1.97 lakh crore. Meanwhile, markets regulator SEBI has decided to decentralise work related to registration of portfolio managers. It has been decided that the processing of registration applications for portfolio managers received on or after Wednesday (August 5) will be decentralised and delegated to the respective regional offices or head office in Mumbai, based on the registered address of the applicant. Moreover, manufacturers looking to set up industrial projects in India have reportedly raised concerns regarding long approval wait times and multiple clearance requirements with officials from the Department of Promotion of Industry and Internal Trade (DPIIT).

The US markets ended higher after a choppy session on Tuesday, lifted by Apple and energy stocks but limited by declines in AIG and Microsoft while investors awaited more U.S. government stimulus to fight economic fallout from the COVID-19 pandemic. Asian markets are trading mostly in green ahead of private survey of China’s services sector in July, with the Caixin/Markit Services Purchasing Manager’s Index will be in focus.

Back home, Tuesday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered splendid gains, led by massive buying in index majors Reliance Industries and HDFC Bank amid heavy foreign fund inflows and a positive trend in global equities. The market indices snapped a four-session losing run, with Sensex and Nifty closing just shy of their crucial 37,700 and 11,100 levels, respectively. The benchmarks opened higher and gradually built on the rally to close near the day's highs, as traders took encouragement with CARE Ratings’ report that banks have sanctioned around 44 percent of the targeted amount of liquidity support to micro, small and medium enterprises (MSMEs) under the government's Emergency Credit Line Guarantee Scheme (ECLGS). Besides, in order to mitigate stress, State Bank of India’s (SBI’s) economists in its report has pitched for a sector-specific loan restructuring package after the end of the six-month loan repayment moratorium on August 31. Sentiments remained upbeat during late afternoon session, with Commerce and Industry Minister Piyush Goyal’s statement that showing signs of significant improvement, the country's exports in July have reached almost the level of the corresponding month last year. He said several indicators are reflecting that the economic activities are reviving in the country. He added that that the country ‘today is in a mood’ to not only bring back economic activity but also become self-reliant, improve the quality and competitive pricing of products. Market participants shrugged off the Asian Development Bank’s (ADB) statement that global remittances will fall by 108.6 billion dollars if the Covid-19 economic impact persists throughout the year. This is equivalent to 18.3 per cent decline from what would have been expected without the impact of Covid-19.