Domestic markets likely to make positive start on rally in global peers

Indian markets ended higher with notable gains on Monday, mainly lifted by information technology (IT) stocks and private sector lenders such as HDFC Bank, and ICICI Bank. Today, the start of session is likely to be positive mirroring rally in global peers. Investors will track the Market Services PMI data for September scheduled to be released later in the day. traders will be taking encouragement with Commerce Minister Piyush Goyal’s statement Indian exports will automatically increase if the products are good and competitively priced and that products are entrepreneurs should not think that subsidies are the only solution. Some support will come with India on Monday registered a sharp drop of 59,773 in the number of new Covid-19 cases, taking the tally to 6,681,953. Traders may take note of the IMF’s statement that public investment should play a central role in the recovery of both emerging and advanced economies from the coronavirus downturn. Meanwhile, Markets regulator Sebi has revamped the product labelling on mutual fund schemes under the risk-o-meter by introducing very high risk category to warn investors. There will be some buzz in the logistic stocks as ICRA said the near-term growth of the Covid-19-battered logistics sector is expected to be driven by specific segments like e-commerce. Banks and financial services related stocks are likely to be in focus. The government appointed Ashima Goyal, Jayanth R Varma and Shashanka Bhide as members of the rate-setting Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI). The monetary policy review scheduled last week was cancelled as term of previous members of MPC had expired. There will be some reaction in fertiliser industry related stocks with ratings agency Icra’s report that the decline in domestic gas prices is likely to benefit urea producers as it will lower the cost of production and reduce the requirement of subsidy.

The US markets ended sharply higher on Monday as investors viewed more fiscal stimulus as likely and after reports that President Donald Trump will leave the hospital where he is being treated for coronavirus. Asian markets are trading in green on Tuesday following overnight gains on Wall Street.

Back home, rising for the third straight session, Indian equity benchmarks ended Monday’s session with gains of over half a percent each, propelled by IT, TECK and Metal counters amid positive cues from Asian markets. Key gauges started the session on a high note, as traders got encouragement with Finance Ministry’s report that important structural reforms undertaken by the government to combat risks associated with the coronavirus pandemic will strengthen the country's economic fundamentals and ensure long-term sustained growth. Additional support also came with a report stated that the CEOs of top 115 companies who met at CII's National Council earlier this week indicated a revival of business sentiment and a gradual rise in expected corporate performance in a poll, raising hopes that a steady recovery of India's economy is on the anvil. However, domestic indices gave up most of initial gains to come off intraday high point in late afternoon session, as traders turned anxious with report that snapping their three-month buying spree, overseas investors turned net sellers in Indian markets in September due to uncertainty ahead of the US presidential polls and surging coronavirus cases. Some concern also came as the National Bank for Agriculture and Rural Development (Nabard) in its latest data report has showed that regional rural banks (RRBs) as a group reported net loss of Rs 2,206 crore in the fiscal year ended March 31, 2020 (FY20), as against Rs 652 crore net loss in FY19. Finally, the BSE Sensex rose 276.65 points or 0.71% to 38,973.70, while the CNX Nifty was up by 86.40 points or 0.76% to 11,503.35.