IGI Logo

Indian markets gained for the third straight session on Monday and touched another record high on October 11, though ended with marginal gains on profit-booking in the final hour of trade. Today, the markets are likely to make negative start after 3-day gains following weakness in global markets. Investors will be eyeing the September CPI Inflation numbers and the Industrial Output for August for further direction. Besides, high oil prices globally continue to remain a concern for the markets world-over. There will be some cautiousness as the World Bank's chief economist said Lack of growth is the biggest economic challenge facing developing economies. However, some respite may come later in the day with the Finance Ministry's Monthly Economic Review stating that strategic reforms and the rapid vaccination drive has placed the country on the path to swift recovery by enabling the economy to navigate the ravaging waves of the COVID-19 pandemic. Additionally, industry body PHDCCI said the economy is poised to achieve 10.25 per cent GDP growth in FY 2021-22 on the back of effective government policies, Reserve Bank’s accommodative policy stance and improved business sentiments. Some support may come as Icra in its report said Securitisation volumes, originated largely by non-banking financial companies (NBFCs) and housing finance companies (HFCs), has likely grown by 45 per cent to around Rs 25,000 crore in the second quarter of the current fiscal. Traders may take note of a private report that Indian businesses have bullish hiring plans and are investing in their workforce as they look to rebuild from the pandemic. Meanwhile, the Finance Ministry said it has released Rs 9,871 crore of revenue deficit grant to 17 states. Energy sector stocks will be in focus as the Ministry of New and Renewable Energy (MNRE) said that India is set to achieve 450 GW renewable energy installed capacity by 2030. There will be some reaction in auto component industry stocks as ratings agency Icra revised downwards by 300 basis points the growth forecast for the auto components industry for the ongoing fiscal year citing the impact of semiconductor shortage on domestic vehicle manufacturers as well as on exports revenues. There will be some result announcements to keep the markets in action.

The US markets ended in red on Monday as investors grew nervous ahead of third-quarter earnings reporting season. Asian markets are trading lower on Tuesday as investors looked for fresh news with inflation worries continuing to weigh.

Back home, Indian equity benchmarks erased most of their initial gains but managed to end Monday’s session marginally in green, despite not-so-encouraging cues from the global market. After making cautious start, markets gained some traction, as traders got some support with Commerce and Industry Minister Piyush Goyal’s statement that the country’s exports are growing at a healthy rate and now exporters can aim for $450-500 billion of outbound shipments during the next fiscal year. He added exports have touched $197 billion during April-September this fiscal. Traders also found some support by World Bank’s report that buoyed by an increase in public investment and incentives to boost manufacturing, India's economy is expected to grow by 8.3 per cent in the fiscal year 2021-22. Buying further crept in with RBI Governor Shaktikanta Das’ statement that the RBI is looking for growth signs to become entrenched and show signs of durability and closely 'watchful' of evolving dynamics. He said the RBI is studying developments around inflation and growth that are dynamic and are evolving. Additional optimism also came in as foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 1,997 crore so far in October as India continues to be a competitive investment destination from a long-term perspective. However, last hour profit-booking in index heavyweights including TCS, Tech Mahindra, Infosys and HCL Technologies pulled back the indices from day's high. Some cautiousness came in as former Reserve Bank Governor C Rangarajan said India becoming a $5 trillion economy by 2025 is impossible under the current circumstance and the country needs to grow at nine per cent per annum for the next five years in order to achieve that. Some anxiety also came with latest RBI data showing that Industrial loan growth, which has been decelerating during the last decade, turned negative for the first time during 2020-21 as economic activity slowed down in the aftermath of the COVID-19 pandemic. Meanwhile, in order to make retail market more competitive and boost economic growth, Union Minister for Road Transport and Highways Nitin Gadkari has emphasized on reduction of logistic costs below 10%. He further said that the government is focusing on integrated infrastructure development through the announcement of the National Infra Pipeline and Gati-Shakti programs. Finally, the BSE Sensex rose 76.72 points or 0.13% to 60,135.78 and the CNX Nifty was up by 50.75 points or 0.28% to 17,945.95.

Above views are of the author and not of the website kindly read disclaimer