Markets to get positive start ahead of RBI policy outcome; TCS result eyed

Indian markets rebounded sharply on Thursday after a day's breather propelled by buying across sectors, as investors' appetite for risk improved globally. Today, markets are likely to continue their previous session gaining momentum with positive start following broadly positive cues. Dalal Street will look forward to the RBI Governor’s address on Friday morning where he will announce the outcome of the Monetary Policy Committee’s (MPC) three-day deliberations. The central bank is expected to maintain the status quo and keep interest rates low along with its accommodative stance. Traders will be taking encouragement as domestic rating agency Crisil ahead of the filing of quarterly earnings by companies said India Inc is set to post an 18-20 per cent revenue growth for July-September as compared to the year-ago period. It said the handsome growth in the topline will be driven by both higher volumes and higher commodity prices. Sentiments will get a boost as Chief Economic Adviser K V Subramanian expressed hope that the country will witness double-digit growth in the current fiscal year aided by a prudent mix of supply and demand side measures undertaken by the government. Some support will come with a private report that India's retail inflation is likely to have cooled for the fourth straight month in September due to a decline in food prices from the year earlier. However, there may be some cautiousness as Fitch Ratings cut India's economic growth forecast to 8.7 per cent for the current fiscal but raised GDP growth projection for FY23 to 10 per cent, saying the second COVID-19 wave delayed rather than derail the economic recovery. There will be some buzz in port sector stocks as Icra Ratings expects overall volumes at Indian ports to continue witnessing improvement through the current fiscal and even surpass FY2020 (pre-Covid) volumes, with April-August cargo volumes having almost reached pre-COVID levels despite the second wave. Railway industry stocks will be in focus as the national transporter said The Indian Railways' freight loading for September 2021 was 106 million tonnes which is 3.62 percent higher compare to last year's loading for the same period (102.30 million tonnes). There will be some reaction in aluminum industry stocks with a private report that an acute coal crunch in India has created a precarious situation for aluminium producers as stockpiles of the fuel plummet to critical levels, according to the country’s top industry group. Also, investor’s focus will be on the IT stocks as sector major Tata Consultancy Services (TCS) will kick start the September quarter earnings’ season.

The US markets ended higher on Thursday in a broad-based rally led by heavyweight technology stocks, after a temporary truce in the debt-ceiling standoff in Congress relieved concerns of a possible government debt default later this month. Asian markets are trading in green on Friday tracking a Wall Street climb as concerns eased about the US debt ceiling and an energy crunch.

Back home, Indian equity benchmarks bounced back and ended the Thursday’s trade with gains of around a percent, following strong global sentiments. After opening in the green, benchmark indices maintained the lead. Traders took encouragement as Moody's Investors Service has said it will upgrade the country’s rating if there is an increase in growth potential and sustained decline in government debt. The rating agency had raised India's sovereign rating outlook to 'stable', from 'negative', while affirming the 'Baa3' rating - which is the lowest investment grade, just a notch above junk status. Support also came with World Bank stating that the increasing pace of vaccinations will determine India’s economic prospects this year and beyond while leaving the growth projection for the country unchanged at 8.3% from its June forecast. Traders also took a note of Finance Minister Nirmala Sitharaman’s statement that India is very close to arriving at the specifics of the two-pillar taxation proposition at the G20 and is in the last stage of finalising the details. A total of 130 countries had in July agreed to a overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate. Sentiments remained positive, as Chief Economic Adviser K V Subramanian said the impact of 'taper tantrum' or withdrawal of monetary stimulus by the US Federal Reserve on India may not be much given the strong fundamentals of the country's economy. Traders remain energized after bank credit rose by 6.67 per cent to Rs 109.57 lakh crore and deposits by 9.34 per cent to Rs 155.95 lakh crore in the fortnight ended September 24, 2021. In the previous fortnight ended September 10, 2021, bank credit had risen by 6.7 per cent and deposits by 9.32 per cent. Meanwhile, emphasizing the importance of multi-lateral organisations, Commerce and Industry Minister Piyush Goyal has called for strengthening of global institutions like the World Trade Organisation (WTO) and said everybody has to work towards a better future of these bodies. Finally, the BSE Sensex rose 488.10 points or 0.82% to 59,677.83 and the CNX Nifty was up by 144.35 points or 0.82% to 17,790.35.