Domestic markets are expected to sustain the gains at open on Tuesday, amid strong GST collection and auto sales figures. SGX Nifty at 18,240 indicates a gap-up opening of another 100 points for Nifty, as Nifty futures on Friday closed at 18,111.15.

Record GST collection

According to analysts, it was a mixed set of numbers on the macroeconomic front. GST collection recorded the highest-ever collection of ₹1.87-lakh crore and passenger vehicle sales grew in double-digits year-on-year last month. However, growth of eight core sectors’ output fell to a five-month low of 3.6 per cent in March, from 7.2 per cent in February, with electricity and cement production slipping from a year ago, and crude oil output falling for the tenth successive month.

Aditi Nayar, Chief Economist, Head - Research & Outreach, ICRA Ltd, said GST collections displayed a robust year-end uptick with a 12 per cent expansion in April 2023, representing the transactions in March 2023. While collections have maintained a healthy 11-13 per cent growth in the recent months, a normalising base and some cooling of inflation may moderate the pace of expansion slightly in the coming quarter, although it would remain in the high single digits.

Global stocks

Global stocks are mixed with the US stock closed in the red, but made a strong recovery from the day’s low level on Monday. Most stocks across the Asia-Pacific region are closed while Nikkei and Kospi are up in early deal on Tuesday even as Australian stocks are down marginally.

Wall Street is breathing a sigh of relief as the largest US lender, JPMorgan, will acquire First Republic Bank. It is starting to look like a few major banking issues will not end up leading to a banking crisis. In less than two months, the US has seen three of the top 30 banks fail.

Edward Moya, Senior Market Analyst, The Americas, OANDA, said the Fed will likely be confident banking jitters are fading, but given the recent boost of inflationary pressures, they might hold off signaling they are ready to hold rates steady after one more hike. The Fed might choose to remain vigilant and that is something this market is not ready to price in.

FM’s take

In the monthly review of March, Finance Minister Nirmala Sitaraman said the Indian economy faces risks such as a slowdown in the global economy, geopolitical development, El Nino effect on the farm output, and financial tightening going ahead. 

Domestic markets are poised for further consolidation said analysts. According to them, the return of foreign portfolio investors will help the market stabilise. The strength in the broader market had been attributed to huge buying from FIIs, which bought around ₹5,395 crore in the cash market last week, and positive results came in from some major companies, said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.

F&O sounds bullish

“Derivative data is also indicating the continuation of an ongoing uptrend as cumulative open interest in the put side recorded at 8.7 crore against 6.9 crore on the call side, bringing OI PCR at 1.25 for weekly expiry. Maximum call open interest was at 18200 and then 18300. On the put side, the highest open interest placement was at 18000 followed by 17800,” he added.

“Ongoing quarterly results will be in focus as some major companies will be announcing their quarterly earnings in the days to come such as Tata Steel, Ambuja Cement, Godrej Properties, MRF, Titan, Dabur, Hero Motocorp, HDFC, Marico and many more,” he further said.

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