In a surprising move, global investment bank Goldman Sachs upgraded Indian stocks to “Overweight”, exactly 6 months after downgrading to underweight. Goldman expects a stable government at the center post elections and that has driven the broker to upgrade the Indian markets to overweight, despite the sharp rally in the last couple of weeks. FPIs have pumped in more than $5 billion since the third week of February and Goldman Sachs also believes that quite a few sectors are showing green-shoots of recovery in sales and profits. These are expected to drive the markets higher.

In a vote for dovish policy measures, over a dozen economists have raised concerns with RBI governor over the sharp economic slowdown in India. It was a routine meeting that RBI governor conducted with the economists from across India ahead of the MPC meeting on 04th April. Most economists called for aggressive rate cuts to boost growth as the economic stress was visible in the IIP and GDP numbers. The RBI’s decision on rates will eventually depend on their focus; liquidity versus rates. As of now, it appears that the RBI may preference liquidity enhancing measures like the dollar swap over rate cuts.

One of India’s key oil suppliers, Venezuela, has stopped the export of crude oil to India even as Brent crude prices turned volatile. Venezuela announced that it will be directing all its oil exports to China and Russia. Venezuela was not too happy with India’s overt support to the US on sanctions. In the meanwhile, oil prices continued to be volatile. Aftertouch a 2019-high above the $68/bbl mark, oil retreated sharply to around $67.44/bbl on supply worries at higher price levels. Venezuela’s move was surprising because India was the second largest cash-and-carry oil customer for Venezuela.

With the issue of jurisdiction of regulation once again coming up, the RBI has moved NCLAT for classification of IL&FS loans as NPAs. RBI has moved the NCLAT to seek a modification to the order passed by the tribunal which has provided moratorium to IL&FS and its 300 group companies from classification as NPA. RBI has expressed concerns that there was an overlap of powers in this case as NPA classification of any systemically important institution comes under the RBI. Tribunal is currently seeking inputs from stakeholders before announcing its final decision on the subject.

It does look like happy days are here for the stock markets. Nifty rallied for the 7th day in succession supported by banks and IT stocks and settled comfortably above the 11,500 marks with a very positive A/D ratio. The rally was largely driven by IT and bank stocks. However, auto stocks continued to be under pressure after Maruti announced a 26% cut in production in March to clear inventory backlog. In the meanwhile, Wall Street edges higher ahead of Fed policy meeting, driven predominantly by IT stocks. Technology stocks led the markets higher on Tuesday as stocks gained from expectations that the Fed may maintain a dovish tone. The dollar weakness and a fall in Treasuries also indicated that the Fed may be dovish. That will be positive for equities, both in the US and also globally.

NSE IT index gained sharply on positive NASSCOM growth projections on Tuesday. A day after the NASSCOM gave a very aggressive 9.2% growth guidance for the IT services sector for fiscal 2020, most IT stocks bounced back sharply after being wearied by the strong rupee. The IT index was up nearly 90 bps on Tuesday with all the large IT companies in the green. NASSCOM has projected digitally to drive growth in FY2020 and that has been the focus of the big IT names. In the last couple of years, the effort of most of the large IT companies has been towards expanding their digital footprint.