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Markets likely to make cautious start on Friday
Jun-21-2019

Indian markets rallied on Thursday, with Sensex and Nifty gaining over a percent each, driven by gains in banking, healthcare and auto stocks, amid strong cues from the global markets. Today, the markets are likely to make a cautious start amid mixed cues from Asian peers as well as higher crude oil prices. Investors will be eyeing the Goods and Services Tax (GST) Council meeting later in the day. Finance Minister Nirmala Sitharaman will chair her first meeting of the GST Council which, among other things, would consider extending the tenure of the anti-profiteering authority by a year, setting up a single point refund system and a mechanism for businesses to issue e-invoices. The agenda of the meeting will also include integration of GST e-way bill system with NHAI's FASTag mechanism from April 1, 2020, to help track movement of goods and check GST evasion. There will be some cautiousness with the Reserve Bank of India’s report that both bank credit and deposits slowed to 9.92 percent and 12.31 percent at Rs 96.52 lakh crore and Rs 125.40 lakh crore, respectively, for the fortnight ending June 7. Also, the RBI’s minutes of the monetary policy meeting showed that the Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth. However, traders may take note of the State Department’s statement that the Trump administration has no plans to cap H-1B work visas for nations that force foreign companies to store data locally. Meanwhile, the RBI said the currency trading platform for retail trading is ready for roll-out by the Clearing Corporation of India (CCIL) on August 5 to enable transparent and fair pricing for retail users, such as individuals and micro, small and medium enterprises. There will be some buzz in infrastructure stocks with report that terming infrastructure as pivotal in propelling prosperity and growth, President Ram Nath Kovind said the government's endeavour is to build 35,000 km of highways, besides expressways, by 2022 and to lay a strong foundation for urban infrastructure that will encourage employment generation.

The US markets ended higher on Thursday as traders continued to react positively to the Federal Reserve's monetary policy announcement on June 19. Asian markets are trading mixed on Friday over US-China trade tensions and rise in crude oil prices.

Back home, Indian equity benchmarks bounced back to end the trading session near their intraday high points on Thursday. The markets made a negative start of day, amid reports that the United States has told India it is considering caps on H-1B work visas for nations that force foreign companies to store data locally. The US government plan to cap H-1B visas issued each year to Indians at between 10% and 15% of the annual quota. There is no current country-specific limit on the 85,000 H-1B work visas granted each year and an estimated 70% go to Indians. But, key indices soon staged recovery, taking encouragement with Commerce and Industry Minister Piyush Goyals’ statement that the government will not allow foreign companies to operate in multi-brand segment and necessary action will be taken against people indulging in predatory pricing. Bourses extended their gains in the second half of the session, tracking firm global markets. Domestic sentiments remained positive as Central Board of Indirect Taxes and Customs (CBIC) informed that all genuine exporters will continue to get their Indirect Goods and Services Tax (IGST) refunds in a timely manner in a fully automated environment. Traders also took encouragement with President Ram Nath Kovind’s statement that the government will soon announce a new industrial policy aimed at promoting the growth of industries and creation of jobs. The street overlooked report that DBS Bank revised India's GDP growth for fiscal year 2020 downwards to 6.8 per cent year-on-year (YoY) from 7 per cent projected earlier, citing headwinds for exports amidst challenging trade outlook. Finally, the BSE Sensex rose 488.89 points or 1.25% to 39,601.63, while the CNX Nifty was up by 140.30 points or 1.20% to 11,831.75.

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