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Indian equity indices, Sensex and Nifty ended sharply lower on Friday dragged by heavy selling across the board amid weak global cues. Today, the markets are likely to get gap-up opening tracking gains in global peers. Traders will be taking encouragement with a private report that the government said that the country’s agri-exports are estimated to grow 15% in FY22, adding that export of products like rice, meat, cereals and dairy items rose 44.3% on-year to $4.81 billion during April-June 2021. Their exports were $3.33 billion in the year ago period. Some support will come as investments in the Indian capital markets through participatory notes (P-notes) rose to Rs 1.02 lakh crore till July-end, making it the highest level in last 40 months. This also marks the fourth consecutive monthly growth. Fall in coronavirus cases also likely to aid domestic markets. India recorded 25,420 new Covid-19 cases and 385 deaths in the past 24 hours, taking its tally to 32,448,969 and the death toll to 434,784. However, traders may be concerned as RBI Governor Shaktikanta Das the resurgence in inflation in May and June above the upper threshold has reignited the debate on the appropriate monetary policy response, according to MPC minutes. There may be some cautiousness as RBI data showed India's foreign exchange reserves decreased by $2.099 billion to stand at $619.365 billion for the week ended August 13 due to a fall in core currency assets and gold. Meanwhile, the government said it has set up an eight-member committee to suggest a roadmap for doubling production and quadrupling exports of handlooms in three years. The committee, chaired by Fashion Design Council of India (FDCI) Chairman Sunil Sethi, would submit its final report within 45 days. There will be some buzz in the metal stocks as Icra in its report said that with demand uptick stemming from the government’s thrust on infrastructure, mainly in the rural markets, capacity utilisation for medium and small long steel product manufacturers is expected to improve in the coming quarters. There will be some reaction in oil & gas industry stocks as Petrol and diesel prices were cut by 20 paise per litre each on Sunday - the first reduction in petrol rate in over a month, and the fourth in case of diesel in less than a week. Besides, Nuvoco Vistas will make its Dalal Street debut today. The Rs 5,000 crore IPO of the company subscribed 1.71 times earlier this month in the price band of Rs 560-570 per share.

The US markets ended in green on Friday despite concerns about economic growth amid rising COVID-19 cases. Asian markets are trading higher on Monday as traders sought to take advantage of last week’s selloff while weighing risks from the delta virus strain and China’s regulatory curbs.

Back home, Indian equity benchmarks closed in the red for second straight day on Friday dragged by heavy selling across the board. Indices opened a day with a strong gap down on weak global cues. The mood on the street remained cautious with the labour ministry’s statement that retail inflation for farm workers and rural labourers rise marginally to 3.92 per cent and 4.09 per cent in July, as compared to the previous month. The numbers in June had stood at 3.83 per cent and 4 per cent, respectively. Traders were also worried, after industry body FIEO said that bilateral trade with Afghanistan has been impacted and Indian exporters are concerned about their payments as banking services and remittances may face restrictions due to the ongoing situation in that country. Sentiments remained fragile in late afternoon session, even as rating agency ICRA’s report stated that India's Gross domestic product (GDP) growth is estimated to come at the deceptively high level of 20 percent and the gross value added (GVA) will register a growth of 17 percent for the April-June 2021 quarter (Q1FY22) but is far below the same in the pre-COVID times. Besides, India Ratings and Research (Ind-Ra) has revised upwards its 2021-22 (FY22) GDP growth forecast to 9.4 per cent, considering the surprisingly faster recovery after the second wave of COVID, higher exports and sufficient rainfall. Traders failed to take some support with Union Commerce and Industry Minister Piyush Goyal’s statement that exports have reached nearly $15 billion for the first half of August, after posting the highest-ever monthly performance in July at $35 billion. He said “It will be a record-breaking year for exports. Exports are engaging with new products, new services, new markets and the world is looking at India as a trusted partner. Finally, the BSE Sensex fell 300.17 points or 0.54% to 55,329.32, while the CNX Nifty was down by 118.35 points or 0.71% to 16,450.50.

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