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Benchmarks likely to make optimistic start of new week

Indian markets ended lower on Friday amid weak global cues as rising bond yields spooked investors. Today, the start of new week is likely to be optimistic tracking positive global cues. Traders will be taking encouragement as FICCI's Overall Business Confidence Index has witnessed a decadal high of 74.2 in the current round on account of improvement in present conditions as well as expectations. Some support will come with the finance ministry’s statement that the Indian economy is likely to do better than the projection of an 8 per cent shrinkage in the current fiscal as economic activity gathers pace with mild stiffening of pandemic curve and the rollout of vaccines. Moreover, Prime Minister Narendra Modi said the production-linked incentive (PLI) scheme would lead to output worth $520 billion in India in the next five years, while industry asked for clarity on implementation across sectors. However, a spike in crude oil prices may play spoilsport. Traders may be concerned as the coronavirus cases in India jumped to 11,229,271 with 18,691 new infections reported across the country, according to Worldometer. The death toll meanwhile reached 157,890 with 99 fatalities in the last 24 hours. There may be some cautiousness as the finance ministry flagged global and domestic inflation as a downside risk to India's growth momentum. Also, the RBI data showed that India Inc's overseas direct investment fell by 31 percent to USD 1.85 billion in February this year. There will be some buzz in IT stocks with the RBI data on performance of private sector corporate showing that Information technology (IT) sector remained in the positive terrain throughout the COVID-19 pandemic period and its sales increased by 5.2 per cent year-on-year in the third quarter of 2020-21. Financial sector stocks will be in focus as Chief Economic Advisor (CEA) Krishnamurthy Subramanian said the country’s financial sector has not really grown as fast as it should have and is still very, very small. There will be some reaction in chemical sector stocks as the government is considering launching a production linked incentive (PLI) scheme in the chemical sector to boost domestic manufacturing and exports. Meanwhile, The Rs 510 crore initial public offer (IPO) of Easy Trip Planners will kick off on Monday. The issue is entirely an offer for sale (OFS) by two promoters, who are offering Rs 255 crore worth of shares each, in the Rs 186-187 price band.

The US markets ended higher on Friday after a rollercoaster session, as healthy February employment data overcame worries of impending inflation, which hit equities earlier in the week. Asian markets are trading mostly in green on Monday after the US Senate passage of a $1.9 trillion stimulus bill and a surprisingly strong payrolls report augured well for a global economic rebound.

Back home, Indian equity benchmarks fell for second straight session on Friday on the back of losses in metal, power and telecom stocks amid weak global cues as rising bond yields spooked investors. Markets made negative start and stayed in red for whole day, as India’s tally of coronavirus cases has risen to 11,173,572, with a daily increase of 16,824 in total cases. Death toll has reached 157,584, with 113 fatalities in a day. India's count of active cases has jumped to 177,967. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. Maharashtra, the most affected state overall, has reported 9,000 new cases. The state has added nearly 80,000 cases in the past 10 days. Traders also remain worried as the Economic Survey 2021 tabled in the state Legislature said Maharashtra's economy is expected to see an eight per cent negative growth during 2020-21 with industry and services sectors bearing the maximum brunt of the COVID-19 pandemic and the subsequent lockdown. Traders took note of private report stating that the Centre is likely to first privatise profit-making state-run companies, a shift from the previously announced strategy of focusing on loss-making units. The NITI Aayog, which is identifying public sector units (PSUs) for privatisation, could put out the first list of companies in April. However, markets managed to trim some losses in late afternoon deals, taking support from the government data showing that foreign direct investment (FDI) in India grew 40 percent to $51.47 billion during April-December 2020-21. India has attracted 22 percent higher FDI inflow (including re-invested earnings) of $67.54 billion during the first nine months of the current fiscal as against $55.14 billion in the same period of 2019-20. However, the markets failed to hold recovery and ended around a percent lower even after Prime Minister Narendra Modi said production linked incentive (PLI) scheme, which is aimed at boosting domestic manufacturing and exports, is expected to increase the country’s production by $520 billion in the next five years. Modi said the government is continuously carrying out reforms to boost domestic manufacturing. Meanwhile, RBI will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) on March 10. RBI will purchase four government securities of different maturity dates aggregating to Rs 20,000 crore and sell three securities aggregating to Rs 15,000 using the multiple price auction method. Finally, the BSE Sensex fell 440.76 points or 0.87% to 50,405.32, while the CNX Nifty was down by 142.65 points or 0.95% to 14,938.10.

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