European markets closed yesterday's session over 2% on back of bond purchase program while Asian stock markets are predominantly trading in the green as Bank of Korea implemented a rate cut in their primary interest rates by 25 basis points to 1.75%. Better than expected job figures also added a positive tone to the investor sentiment. Meanwhile, Japan markets received a major boost as value of Yen dropped against the US Dollar. Japan, Chinese, Hong Kong, Taiwan and Korean markets are trading with gains of 1.3%, 1%, 0.1%, 0.8% and 0.3%, respectively.
BSE Sensex and NSE-Nifty has given a strong opening. Both the indices are trading higher by 0.5%. All the sector are witnessing investor attention, with the highest gainer being the Banking Sector. BSE Mid Cap and BSE Small Cap have outperformed the market and are trading with 0.7% gains. The value of India Rupee has fallen and is trading with a loss of 0.06% or 0.04 at Rs 62.74 against the US Dollar.
Commodity prices are trading in the red. Gold prices, per 10 grams, has fallen nearly 1% or Rs 234 and is trading near Rs 25,685 levels while Silver prices, per kilogram, have fallen nearly 1.8% or Rs 600 and is trading near Rs 35,000 range. Crude oil prices have fallen about 1.6% or Rs 50 and is trading near Rs 3012 per barrel.
As per the financial daily, the International monetary fund (IMF) expects India's Gross Domestic Product (GDP) to grow by 7.2% this fiscal. Reportedly, it also added the GDP can further grow to 7.5% next fiscal. Structural reforms and policy changes are primarily responsible for the optimism and growth of Indian economy. High investment flow and easing of business environment is expected to bring the change in Indian economy. These estimates have been calculated on the basis of the new methodology which India has recently adopted to calculate the GDP. In the previous year, for the same period, IMF had predicted a growth rate of 5.6% and 6.4% for two consecutive fiscals.
According to leading financial daily, the international credit rating agency Moody's, maintained its "Stable" outlook on sovereign rating at Baa3. The rating agency expects India to grow at 7.5% next fiscal while retail inflation is expected to hover around 6.5% by next year, higher than the current rate of 4.6%. While on the one hand robust reforms and policy changes have increased India's chances on growing faster than expected, but there are also various factors which pose hurdle. Primary factor being the weakness within the banking sector and its capacity to tackle any form of unseen event risks. Indian economy, in the last couple of years, has witnessed slower growth and high inflation; this has tampered with the asset quality of the banking sector. Hence, these reforms and policy changes are important to rejuvenate the banking sector, which can lead to India's growth.