After a volatile session on Monday, signals from global markets indicate that the domestic markets are expected open on a strong note on Tuesday. The Dow Jones Industrial Average crossed the 35,000-mark for the first time. In fact, all the three major US indices closed at record highs, betting on the economic recovery.

Though domestic markets surrendered their gains to end flat on Monday, the undertone was strong with many mid and small-cap stocks gaining momentum. Analysts expect the broader market to maintain the momentum. Softening of inflation is also expected to add strength to equity markets as, acccording to them, RBI will have more room on the rate front to aid economic growth.

The 29.3 per cent growth in the index of industrial production has also not disappointed many analysts.

The SGX Nifty at 15,822.80 (8.15 am IST) indicates a gap-up opening of over 110 points, as Nifty futures on Monday closed at 15,711.95. Overnight, the DJIA closed at 34,996.18, a gain of 0.4 per cent, while the broader S&P 500 gained 0.4 per cent to 4,384.63, and the tech-heavy Nasdaq Composite Index advanced 0.2 per cent to 14,733.24. Asian markets are up between 0.2 per cent and 0.8 per cent in early deals on Tuesday.

Though, the average CPI for the Q1-FY22 came up at 5.6 per cent, higher than the RBI’s projection of 5.2 per cent, it is unlikely to see the central bank tightening its stance. The growth of the economy would still be the priority for RBI, said Prof. Krupesh Thakkar, HoD – Financial Markets, ITM B-School.

The industrial production output for May shows positive growth. The rise has come primarily on the back of a lower base recorded last year. IIP on a month-on-month basis has fallen due to the strict lockdown that was imposed due to the second wave, said Nish Bhatt, Founder & CEO, Millwood Kane International - an investment consulting firm. Rising Covid cases and lockdown by the states will guide demand and industrial production data going forward, he added.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, "We expect the earnings momentum to accelerate in FY22 as the pace of vaccinations picks up and the economy opens up further. Consistent earnings delivery v/s expectations are critical for further outperformance in our view."

STOCKS TO WATCH

Reliance Industries has invested Rs 1,00,000 in 10,000 equity shares of Rs 10 each of Reliance New Energy Solar Ltd (RNESL), a newly incorporated wholly-owned subsidiary. RNESL has been incorporated to undertake activities relating to solar energy. It is yet to commence business operations.

IDBI Bank : Moody's has rated IDBI's local and foreign-currency bank deposit ratings two notches above its Baseline Credit Assessment (BCA) and Adjusted BCA of b1. Further, the baseline credit assessment (BCA) of IDBI has been upgraded to b1 from b2. The outlook, where applicable, is Stable. Moody's rating action is of standalone basis as IDBI had terminated the rating contract / engagements with Moody's in December 2017.

FDC has announced the launch of India's first oral suspension of Favipiravir - Favenza Oral Suspension, used to treat mild to moderate cases of Covid-19. This prescription-only solution is currently available at all retail medical outlets and hospital pharmacies across the country. The Favenza suspension is unique due to its Convenient Loading Dose (Day 1) of 18 ml in the morning and 18 ml in the evening, which are equivalent to 9 tablets of Favipiravir 400mg, making the process of Covid-19 treatment hassle free.

Ashoka Buildcon has received a Letter of Acceptance from the National Highways Authority of India for 'Request for Proposal for Development of Memmadpur GPariyojana - Package-II in Punjab. The accepted bid price is Rs 726 crore.

Shilpa Medicare : The board has approved transfer of API business consisting of Unit-1 and Unit-2 situated at Raichur, Karnataka, by way of slump sale to a wholly-owned subsidiary. The consideration would not be less than the fair market value of the net assets as per Rule 11 UAE of the Income Tax Rules, 1962 which will be based on a report to be obtained from an independent valuer, it said.

Results Calendar:

Deccan Health Care (for Q4 & FY21), Gagan Gases, Mindtree, Shree Ganesh Remedies, Suryavanshi Spinning Mills (Q4 & FY21), Tata Metaliks and WS Industries (Q4 & FY21) will declare their quarterly results for the period ended June on Tuesday.

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