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Indian equity benchmarks ended lower on Friday as India's external debt stood at USD 571.3 billion at end-June, recording an increase of USD 1.6 billion over its level at the end of March 2021. Today, markets are likely to make positive start on firm global cues. Traders will get encouragement as former Niti Aayog vice-chairman Arvind Panagariya said the fundamentals of the Indian economy are sound as the real GDP in Q3 and Q4 of FY21 already crossed the pre-pandemic level. Some support may also come as Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Government of India, Piyush Goyal said at a time when the whole world is coming together to recover from the pandemic and bring growth back on track, a resurgent India is ready to take on the responsibility of being the frontrunner in this revival process. Meanwhile, terming Insolvency and Bankruptcy Code as a seminal reform, Chief Economic Adviser KV Subramanian said it has been instrumental in changing the mindset of promoters of businesses by making them more accountable. However, there may be some cautiousness as trade deficit spiked to almost $23 billion in September from $13.8 billion in the previous month, as imports surged at a much faster pace than exports, driven by elevated global crude oil prices and massive purchases of gold in the build-up to the festival season. With crude oil prices hovering around 3-year highs, petroleum imports may continue to surge in the coming months. This will pressure trade and current account deficits, which have remained well under control in the aftermath of the pandemic. There will be some buzz in sugar sector’s stocks as Food Secretary Sudhanshu Pandey said sugar industry should now look beyond its immediate blending target of 2025 and focus on newer technologies as the journey of ethanol blending has just started.

The US markets ended higher on Friday as investors shook off a rough September and reports of a new oral treatment for Covid-19 boosted shares of companies tied to the economic recovery. Asian markets are trading mostly higher in early deals on Monday following positive cues from US markets.   

Back home, Indian equity benchmarks settled in red for the fourth straight day on Friday, dragged by losses in index heavyweights like Bajaj Finserv, Maruti Suzuki and Bharti Airtel amid weakness across global markets. After opening in the red, benchmark indices slipped further lower, as traders were concerned with former RBI Governor D Subbarao stressed on the need to accelerate India’s economic growth rate and make sure that this benefit of growth is shared, even as he said that unemployment has taken a form of crisis in the country. Subbarao further said the organised sector is shedding jobs and the labour force is moving from high productive sector to the unorganised sector. Traders also took a note of the RBI report stating that India's external debt stood at $571.3 billion at end-June, recording an increase of $1.6 billion over its level at the end of March 2021. However, the external debt to GDP ratio declined to 20.2 percent at June-end 2021 from 21.1 percent as of March 31. Valuation gain due to the appreciation of the US dollar vis-a-vis the Indian rupee was at $1.7 billion. Markets continued to trade on a negative note in late afternoon deals even as private survey stating that India’s manufacturing activity recovered slightly in September, from a slowdown in growth in the previous month of August as strengthening demand conditions amid the easing of COVID-19 restrictions boosted sales. According to the monthly IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) survey, manufacturing PMI stood at 53.7 in September, up from 52.3 in August. Market participants also paid no heed towards veteran banker KV Kamath’s statement that the country's economy is set for a stronger performance going forward, driven by growth in large corporates, agriculture and most importantly digital startup sector. Meanwhile, the Controller General of Accounts (CGA) in its latest data has said that the government's fiscal deficit stood at Rs 4.68 lakh crore or 31.1 per cent of the Budget estimates at the end of August 2021. The deficit figure in the current fiscal appears much better than the previous financial year when it had soared to 109.3 per cent of the estimates, mainly on account of a jump in expenditure to deal with the COVID-19 pandemic. Finally, the BSE Sensex fell 360.78 points or 0.61% to 58,765.58 and the CNX Nifty was down by 86.10 points or 0.49% to 17,532.05.   

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