Markets likely to start session in red; TCS result eyed

Indian markets resumed an up move on Friday after three days of losses, as investors cheered the RBI's status quo on key interest rates and policy stance at its first review of FY23 as expected. Today, the markets are likely to start holiday shortened week in red amid weak global cues and the on-going Russia-Ukraine conflict. Investors awaited the onset of the corporate earnings season with Tata Consultancy Services (TCS) due to report its financial results for the March quarter after market hours today. Traders will be concerned as the Reserve Bank data showed that in the steepest weekly fall ever, India's forex reserves slid by $11.173 billion to $606.475 billion as the currency came under pressure due to geopolitical developments. There will be some cautiousness as Revenue Secretary Tarun Bajaj warned that FY23 was unlikely to see a rate of growth in tax collections similar to that in FY22. The revenue secretary added that the finance ministry would get a better picture of the situation once the first installment of advance tax collections was received in mid-June. However, some respite may come later in the day as preliminary data of the commerce ministry showed that India’s exports grew by 37.57 per cent to $9.32 billion during April 1-7. Imports during the period rose by 8.29 per cent to $10.54 billion. There will be some buzz in auto industry stocks as data compiled by automobile dealers' body FADA showed that electric vehicle retail sales in the country witnessed over three-fold jump last fiscal with two-wheeler offtake leading the segment. Power stocks will be in focus with report that total outstanding dues owed by electricity distribution companies (discoms) to power producers increased by 17.3 per cent year-on-year to Rs 1,23,244 crore in April 2022. There will be some reaction in media and entertainment industry stocks as a report by the Confederation of Indian Industry (CII) showed that the media and entertainment industry in South India is growing at a compound annual growth rate (CAGR) of 15 per cent making a post-crisis comeback.

The US markets ended mostly lower on Friday as investors assessed the economic outlook with the Fed moving to fight inflation. Asian markets are trading mostly in red on Monday as investors awaited central bank meetings lined up during the course of the week.

Back home, snapping a three-day losing streak, Indian equity benchmarks ended higher on Friday, led by a strong buying support in the index heavyweights ITC, Mahindra & Mahindra and Dr. Reddy's Lab.  After making positive start, key indices swung between losses and gains, as traders got anxious with the finance ministry said the current elevated level of international crude price, should it persist for a long time, may come in the way of India achieving a real economic growth rate of 8%-plus in FY23 and pose upside risks to inflation as well. But, markets rallied sharply in afternoon deals, as the monetary policy committee (MPC) decided to hold repo rate at 4% and the reverse repo rate at 3.35%. While the RBI's rate-setting panel maintained its accommodative stance, it also voted unanimously to focus on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. Sentiments were also upbeat as RBI Governor Bimal Jalan has said that the country’s economy is in good shape as India’s GDP growth rate and foreign exchange reserve are high. Notwithstanding economic uncertainties triggered by the Russia-Ukraine war that is also impacting the global supply chain, Jalan said it is not going to affect India’s economic performance. Some solace also came with a private report that with the e-way bills generated for inter-state trade in goods under the goods and services tax (GST) regime touching a record in March, the monthly GST collections will likely hit an all-time high of around Rs 1.5 trillion in April (March transactions). Adding to the optimism, Revenue Secretary Tarun Bajaj has said India's tax collections soared to a record high of Rs 27.07 lakh crore in the fiscal year ended March 31 (FY22) compares with budget estimate of Rs 22.17 lakh crore. The rise in tax collections was mainly on account of jump in mop-up from income and other direct taxes as well as indirect taxes. Finally, the BSE Sensex rose 412.23 points or 0.70% to 59,447.18 and the CNX Nifty was up by 144.80 points or 0.82% to 17,784.35.