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Indian markets scaled fresh all-time highs and closed at their highest closing levels on Friday as bulls commanded D-Street’s movement. Today, markets are likely to make pessimistic start of holiday-shortened week following a muted trend in the Asian peers, in the absence of any major domestic trigger. Equity markets would remain closed on Thursday, August 19 for Muharram. On the macroeconomic front, the WPI data will be released on August 16. Traders will be concerned with a private report that it is highly unlikely that India will become a $5 trillion economy by 2024-25 due to the slowdown caused by the COVID-19 pandemic. Some cautiousness will come as India recorded 33,221 new Covid-19 cases and 421 deaths in the past 24 hours, taking its tally to 32,225,175 and the death toll to 431,674. Kerala reported 18,582 new infections, Maharashtra 4,797, followed by Andhra Pradesh (1,506), Tamil Nadu (1,896), Karnataka (1,669), West Bengal (673) and Delhi (53). However, some respite may come as the data released by the commerce ministry showed that the country's exports surged 49.85 per cent to $35.43 billion in July on account of healthy growth in petroleum, engineering, and gems and jewellery segments, even as the trade deficit widened to $10.97 billion during the month. Imports during the month also rose by about 63 per cent to $46.40 billion. Some support may also come as RBI data showed country's foreign exchange reserves increased by $889 million to a lifetime high of $621.464 billion in the week ended August 6, 2021. Meanwhile, India and Russia have discussed expanding cooperation in the energy sector as New Delhi looks at newer sources of oil and natural gas to diversify its import basket. There will be some buzz in textile industry stocks as the government notified the RoSCTL scheme for textiles exporters and said the duty credit scrips under this support measure would be issued without insisting on realisation of the export proceeds. Aviation stocks will be in focus as the Directorate General of Civil Aviation (DGCA) said around 50.07 lakh domestic passengers travelled by air in July, 61 per cent higher than the 31.13 lakh who travelled in June. It also said 21.15 lakh people and 57.25 lakh had travelled within the country by air in May and April, respectively. There will be some reaction in auto stocks as Prime Minister Narendra Modi formally launched the National Automobile Scrappage Policy, which he said would attract investments of about Rs 10,000 crore. He added the policy would also help in getting rid of unfit and polluting vehicles in a scientific manner. Meanwhile, four companies will list on bourses today, namely Devyani International, Windlas Biotech, Krsnaa Diagnostics, and Exxaro Tiles.

The US markets ended higher on Friday boosted by forecast-beating corporate earnings. Asian markets are trading mostly in red on Monday after a raft of Chinese data showed a surprisingly sharp slowdown in the engine of global growth, just as much of the world races to stem the spread of the Delta variant of COVID-19 with vaccinations.

Back home, extending previous session’s northward journey, Indian equity benchmarks ended at their fresh record closing levels on Friday. Both the S&P BSE Sensex and the NSE Nifty 50 settled above crucial 55,400 and 16,500 levels, respectively. Markets made gap-up opening and continued to move higher, on the back of promising inflation and industrial production data. Retail inflation eased to a three-month low of 5.59 per cent in July, mainly due to softening food prices, after holding above 6% for two months in a row. The Consumer Price Index (CPI) based inflation was 6.26 per cent in June and 6.73 per cent in July 2020. Besides, Industrial production surged by 13.6 per cent in June mainly due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained below the pre-pandemic level. In June 2021, the IIP stood at 122.6 points compared to 107.9 point in the same month last year. Sentiments on the street also remained optimistic with Finance Minister Nirmala Sitharaman’s statement that the government is an active participant in the recovery process and remains committed to reforms as is evident from a series of tangible steps taken including the passing of seven critical bills related to finance and corporate affairs in the monsoon session of parliament, commitment towards disinvestment and privatization and using technology to improve tax buoyancy. Markets extended rally in second half of trade to settle near intraday highs, as Commerce and Industry Minister Piyush Goyal assured the industry that the government will protect its interests in free trade agreements (FTAs) and these pacts would be finalised after holding detailed discussions with all the stakeholders. The market sentiment also received a boost after National Statistical Office (NSO) reported that manufacturing sector, which constitutes 77.63 per cent of the Index of Industrial Production (IIP), grew by 13 per cent in June this year due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained below the pre-pandemic level. Besides, recognising the role of innovations to strengthen India's response to COVID-19 crisis and preparedness for emerging healthcare needs, the National Health Authority has signed an MoU with the Indian Institute of Technology Delhi. Finally, the BSE Sensex rose 593.31 points or 1.08% to 55,437.29, while the CNX Nifty was up by 164.70 points or 1.01% to 16,529.10.

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