Indian Equity Markets To Start New Year On  Positive Note

Indian equity markets ended last trading day of Calendar Year 2020 on a flat note. Today, the start of the New Year is likely to be positive. Traders will be getting some encouragement with NITI Aayog Vice-Chairman Rajiv Kumar stating that India’s economy will grow at 10 per cent in real terms and by the end of next year it will reach pre-COVID-19 level. Talking about the farmers' protest against the three agriculture laws, the NITI Aayog Vice Chairman said the government is trying its best to get their understanding and that they are not misguided and their doubts are cleared. Some support may also come on report that foreign direct investment (FDI) equity inflows into India grew 21 per cent to USD 35.33 billion during April-October period of the current financial year. In the year-ago period, FDI equity inflows stood at USD 29.31 billion. Meanwhile, retail inflation for industrial workers eased to 5.27 per cent in November compared to 5.91 per cent in October, mainly due to lower prices of certain food items. However, traders will remain concern on report that contracting for the ninth consecutive month, the output of eight core infrastructure sectors dropped by 2.6 per cent in November, mainly due to decline in production of natural gas, refinery products, steel and cement. The production of eight core sectors had recorded a growth of 0.7 per cent in November 2019. Meanwhile, India's federal fiscal deficit in the eight months to the end of November stood at 10.75 trillion rupees, or 135.1% of the budgeted target for the whole fiscal year. Net tax receipts were 6.88 trillion rupees, while total expenditure came to 19.06 trillion rupees.

The US markets ended higher as rollout of coronavirus vaccines have bolstered expectations that the economy will quickly rebound from the pandemic. Most of the Asian markets are closed on Friday on account of the New Year holiday.

Back home, Indian equity benchmarks concluded last trading session of calendar year (CY) 2020 on a flat note, as investors tracked news related to Covid-19 vaccines rollout across the globe for further bets. For most part of the day, benchmarks traded in a choppy manner, as future and option contracts for the month of December expired. Traders remained cautious with Finance ministry in its latest quarterly report on public debt management has said that total liabilities of the government increased to Rs 107.04 lakh crore at end of Q2 (July- September) of FY21 from Rs 101.3 lakh crore at end of Q1 (April-June) of FY21. This represented a quarter-on-quarter increase of 5.6 percent in Q2 FY21. Some anxiety also came with data showing that India’s current account surplus moderated to $15.5 billion (2.4 per cent of Gross Domestic Product) in quarter ended September 2020 (Q2FY21) from $19.2 billion (3.8 per cent of GDP) in (Q1FY21). The current account balance was in deficit to the tune of $7.6 billion in Q2 of 2019-20 (1.1 per cent of GDP). However, traders found some support with report that President Vladimir Putin expressed hope that next year Russia and India would continue to work towards stepping up constructive bilateral cooperation as well as coordinating efforts to address topical issues on the regional and global agendas. Traders also took note of report that Federation of Indian Exports Organisations (FIEO) President Sharad Kumar Saraf stated that the country's exports may reach $290 billion by the end of this fiscal (FY21) as the outbound shipments were hit hard by the COVID-19 pandemic during the first half of the year. He also said that 2021 would bring a ray of hope and optimism for the exporting community. Meanwhile, the commerce ministry has said that an import monitoring system (IMS) is being developed for several sectors, including aluminium, copper, footwear, furniture, sports goods, and gym equipment. The system would help gather advanced information on imports of these products and make it available to the stakeholders, including government and domestic industries. The system is already in place for steel and coal. Finally, the BSE Sensex rose 5.11 points or 0.01% to 47,751.33, while the CNX Nifty was down by 0.20 points to 13,981.75.

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