Sensex, Nifty Set To Open Higher After Trade Truce

Indian shares look set to open a tad higher on Monday as investors digest fiscal deficit and current account data and react positively to the U.S.-China truce on the trade front.

India’s fiscal deficit touched 52 percent of the budget estimate for the full year in the first two months of 2019-20 as against 55.3 percent during the same period last year, official data showed.

The current account deficit widened to 2.1 percent of GDP in FY19 from 1.8 percent a year ago, while the fourth quarter the deficit narrowed to 0.7 percent of the GDP, compared with 2.7 percent in the October-December period.

Meanwhile, U.S. President Donald Trump and Xi Jinping have agreed to resume trade negotiations at the G20 summit in Japan.

The U.S. agreed to put off additional tariffs on Chinese goods indefinitely while removing some curbs on Huawei Technologies Co. buying high-tech equipment from the U.S. In response, China said it would buy large amounts of American farm products.

Markets will shift their entire focus on the Union Budget presentation on July 5, which is expected to give clear direction for the economy.

Auto stocks will be in focus today as automakers reveal their June sales data amid subdued demand.

OPEC’s two-day meeting is scheduled to be held on Monday and Tuesday as the oil cartel tries to extend the output cuts by another six to nine months.

On the data front, reports on manufacturing, service sector activity and infrastructure output may sway sentiment as the week progresses.

Asian markets rallied this morning, with benchmark indexes in China and Japan climbing around 2 percent, as a thaw in the Sino-U.S. trade dispute tempered risks to the global economy. Investors shrugged off data showing that Chinese manufacturing activity shrank more than expected in June.

The U.S. dollar

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