Market may open on a firm note

Local stocks are likely to open on a strong note after Finance Minister Nirmala Sitharaman announced rollback of FPI surcharge and a slew of measures to revive economy. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could jump 84 points at the opening bell. However, strong gains may be capped due to weak global stocks on escalating US-China trade war.

Finance Minister Nirmala Sitharaman after market hours on Friday, 23 August 2019 said the government decided to withdraw the surcharge on foreign portfolio investors (FPIs), which she had unveiled in her budget for the fiscal year ending March 2020.

For the banking sector, FM announced upfront release of Rs 70,000 crore, additional lending and liquidity to the tune of about Rs 5 lakh crore by providing upfront capital to public sector banks.

To support to non-banking financial companies (NBFCs)/housing finance companies (HFCs), FM announced additional liquidity support to HFCs Rs 20,000 crore by NHB thereby increasing it to Rs 30,000 crore.

To boost infrastructure sector, FM announced Rs 100 lakh crores for developing modern infrastructure over 5 years.

Moody's Investors Service on Friday cut India's GDP growth forecast for 2019 calendar year to 6.2% from the previous estimation of 6.8%. For 2020 calendar year, it reduced the estimate by a similar measure to 6.7%. Moody's said that the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment.

Overseas, Asian stocks fell Monday following an escalation in the US-China trade war late last week.

US stocks ended sharply lower Friday as the US-China trade war intensified further, after President Donald Trump said he's ordering American companies to start looking for an alternative to China, while readying additional measures after Beijing imposed retaliatory tariffs on imports of US goods.

China announced new tariffs of 5% and 10% on $75 billion in U.S. imports, set to go into effect in two tranches, on Sept. 1 and Dec. 15, respectively. The Chinese government said that the move was in response to the Trump administration's plans to institute 10% tariffs on $300 billion in Chinese imports, also in two stages and on the same dates, announced earlier in August.

Federal Reserve Chairman Jerome Powell left the door open for another interest rate cut in September in a widely anticipated speech in Jackson Hole, Wyoming.

Back home,the market ended with decent gains on Friday, reversing early losses. The 30-share BSE Sensex rose 228.23 points or 0.63% to 36,701.16. The Nifty 50 index rose 88 points or 0.82% to 10,829.35.

The trading activity on that day showed that the foreign portfolio investors (FPIs) sold shares worth a net Rs 1737.20 crore on Friday, 23 August 2019, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1548.49 crore on Friday, 23 August 2019, as per provisional data.

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