Benchmarks likely to open in red on weak macro-economic data

Indian markets ended slightly higher after paring most gains on Monday as the power failure in Mumbai disrupted the trading activity. Today, the start of session is likely to be pessimistic amid weakness in Asian peers. Also, weak macro-economic data may dampen the sentiments in the markets. The government data showed that Industrial production declined by 8 percent in August, mainly due to lower output of manufacturing, mining and power generation sectors. Also, retail inflation rose to 7.34 percent in September, mainly on account of higher food prices. Investors will track the Supreme Court's hearing on a batch of petitions seeking a waiver of interest on loans during the moratorium period and seeking an extension of the moratorium. Besides, Finance Minister Nirmala Sitharaman said that no consensus was reached on the borrowing for a shortfall in GST compensation cess. Traders will be taking encouragement with Niti Aayog Vice-Chairman Rajiv Kumar’s statement that the fresh stimulus package announced by Finance Minister Nirmala Sitharaman to boost domestic demand will give a much-needed push to economic activity. Some support will come in as India Inc cheered Finance Minister Nirmala Sitharaman's announcement of payment of cash in lieu of LTC and Rs 10,000 festival advance to government employees, saying these measures will boost demand while instilling a feel good factor in the people and energize growth. Also, India witnessed a major drop of  54,265  new Covid-19 cases, taking the tally to 7,173,565 and the death toll reached 109,894. For the fifth day in a row, the number of active Covid-19 cases remained below 900,000. Traders may take note of Ficci President Sangita Reddy’s statement that there is a need for convergence between self-reliance and globalization. Meanwhile, the Securities and Exchange Board of India (SEBI) is planning to impose an additional charge on the redemption of debt funds in stressed schemes to ensure sufficient liquidity to meet redemption stress. Telecom stocks will be in focus reacting to the Telecom Regulatory Authority of India's (TRAI) latest telecom subscription data report. Reliance Jio added 3.55 million subscribers in July 2020, while Vodafone Idea lost 3.7 million users. Bharti Airtel added 3.26 million wireless subscribers during the month. There will be some reaction in aviation stocks with Union Civil Aviation Minister Hardeep Singh Puri’s statement that the total number of passengers flying in a single day increased to 1,78,431 on October 11.

The US markets ended higher on Monday as technology stocks helped to lead the markets higher, as reflected by the significant advance by the tech-heavy Nasdaq. Asian markets are trading in red on Tuesday as traders remained cautious ahead of Chinese trade figures for September which are expected to be released later in the day.

Back home, Indian equity benchmarks gave up most of their initials gains to end marginally higher on Monday, led by buying in IT, TECK, Healthcare and FMCG stocks. The benchmarks staged a gap up opening, as traders took encouragement with the report that concerted efforts by the Reserve Bank to move to a non/less-cash economy by pushing digital payments have begun to pay rich dividends as the volume of such payments has jumped manifold in the past five years. Sentiments remained positive with NITI Aayog CEO Amitabh Kant’s statement that India's massive digital footprint is one of its biggest strengths for Artificial Intelligence (AI) development, and established platforms like Aadhaar, UPI along with massive digital infrastructure create a unique opportunity for this futuristic technology to be leveraged to enhance transparency and improve governance. Some support also came in with report that foreign portfolio investors (FPI) have invested Rs 1,086 crore on a net basis so far in October in Indian markets, tracking encouraging factors including improved GST collection, acceleration in economic activity and positive global cues. However, markets witnessed volatility in late afternoon session, as investors remained on sidelines ahead of industrial production data for August and CPI inflation for September which are due later in the day. But, indices managed to end session in green terrain, as the government has unveiled a one-time Rs 10,000 interest-free festival advance to all its officers and employees, as part of plans to increase consumer spending to spur demand in the economy. Besides, Prime Minister Narendra Modi said that the Survey of Villages and Mapping with Improvised Technology in Village Areas (SVAMITVA) scheme will bring ‘historical changes’ in the villages across the country. Finally, the BSE Sensex rose 84.31 points or 0.21% to 40,593.80, while the CNX Nifty was up by 16.75 points or 0.14% to 11,930.95.