Markets likely to make flat-to-negative start on Monday

Indian markets rose notably on Friday despite mixed global cues and signs that India has entered the third wave of the Covid-19 pandemic. Today, that markets likely to start flat-to-negative note as global peers traded mixed. Traders will be concerned as India reported 123 Omicron cases on Sunday. India’s cumulative Omicron tally, after adding old unaccounted cases, stood at 1,711. There will be some cautiousness as the Reserve Bank said India's current account slipped into a deficit of $9.6 billion or 1.3 per cent of GDP in the September quarter. Besides, the RBI said India's forex reserves decreased by $587 million to $635.08 billion for the week ended December 24. However, some respite may come later in the day as the Finance Ministry said GST revenue collected in December 2021 was over Rs 1.29 lakh crore, 13 per cent higher than the same month last year. The gross GST revenue collected in the month of December 2021 is Rs 1,29,780 crore, of which CGST is Rs 22,578 crore, SGST is Rs 28,658 crore, IGST is Rs 69,155 crore and cess is Rs 9,389 crore. Traders may take note of report that India will start administering its indigenous Covid vaccine Covaxin to the 15 to 18 age group from Monday. Meanwhile, the central government's fiscal deficit at the end of November worked out to be 46.2 percent of the annual budget target for the financial year 2021-22 due to an improvement in the revenue collection. There will be some buzz NBFCs stocks as Crisil’s report that non-banking financial companies (NBFCs) showed resilience in 2021 despite the coronavirus pandemic woes and are expected to witness continued momentum in growth this year. Textile industry stocks will be in focus with report that heeding to demands from states, including the polls-bound ones, the Goods and Services Tax (GST) Council held an emergency meeting on Friday and virtually rolled back a decision taken in its September meeting to increase the GST rate on textile products from 5% to 12%. There will be some reaction in aviation industry stocks as aviation turbine fuel (ATF) price has been hiked by Rs 2,039.63 per kilolitre, or 2.75 per cent, to Rs 76,062.04 per kl in the national capital. Auto stocks will be in limelight reacting to their monthly sales numbers.

The US markets ended lower on Friday as traders seemed reluctant to make significant moves on the final trading day of the year. Asian markets are trading mostly in green on Monday amid thin trade on account of holidays in most regions.

Back home, Indian equity benchmarks closed on a high note on Friday, the last trading session of calendar year 2021, led by gains in metal and consumer durables shares, even though concerns about the Omicron variant of coronavirus kept investors cautious globally. Markets started day on positive note and displayed a firm trend throughout the day, as traders got some encouragement with India Ratings and Research’s (Ind-Ra) statement that higher tax and non-tax revenue collections this fiscal are expected to more than offset the shortfall in disinvestment revenue, leading to the fiscal deficit coming in at 6.6 per cent of GDP in FY22, or 20 basis points lower than the budgeted target. Traders remained positive, as markets regulator Sebi extended the deadline till September 30 next year for the applicability of the tweaked reporting requirements for alternative investment funds (AIFs). Earlier, the deadline was December 31, 2021. Besides, a High-Level Committee chaired by Union Home Minister Amit Shah has approved Rs 3,063.21 crore of additional central assistance to six states under the National Disaster Response Fund. Sentiments remained upbeat after India’s agricultural and processed food exports have grown at a steady pace in the last decade notwithstanding several logistical challenges faced in the global trade of the commodities. Exports of agricultural and processed food products under Agricultural and Processed Food Products Export Development Authority (APEDA) basket rose to $20,674 million (Rs 15,30,50 crore) during 2020-21, from $17,321 million (Rs 83,484 crore) in 2011-12. Meanwhile, the finance ministry has extended the benefit of reduced performance security of 3 percent for all central government tenders/contracts issued/concluded till March 31, 2023. According to the rules, a successful bidder awarded a government contract has to deposit a performance security of 5-10 per cent of the value of the contract with the government. Finally, the BSE Sensex rose 459.50 points or 0.80% to 58,253.82 and the CNX Nifty was up by 150.10 points or 0.87% to 17,354.05.