The Indian markets despite some intraday recovery attempts could not break into green and closed lower for the fifth straight session. Today, the start is likely to be in green and some recovery can be expected on the back of good global cues and positive macro data. Consumer Price Index (CPI) has eased more than expected at 7.31% in June as compared to 8.28% in May. Earlier Wholesale Price based Inflation (WPI) too fell to a five-month low of 5.53% in June following export curbs by the government on certain commodities. However, the Reserve Bank of India is not likely to buzz on the numbers given the weak monsoon scenario in the country, which may fuel the inflation in coming days again. Meanwhile, rating agency Moody's has said that the Budget 2014-15 has outlined steps to support faster economic growth, but absence of detailed implementation plan makes it modestly credit positive for India. Pharma stocks are likely to keep reeling under pressure with National Pharmaceutical Pricing Authority’s (NPPA) move to bring 108 formulation packs of 50 diabetes and cardiovascular medicines under price control. There will be some buzz in the non-banking finance stocks as the Reserve Bank of India has asked non-banking finance companies to not charge foreclosure charges/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.
The US markets bounced back and ended higher in last session, taking Dow back above 17,000. Upbeat earnings numbers and some news on the merger-and-acquisition front lifted the markets higher for the day. The Asian markets have mostly made a positive start led by the Japanese market which is up over half a percent ahead of the Bank of Japan’s monetary policy announcement.
Back home, continuing their last four days fall, Indian equity benchmarks ended a choppy day of trade on a flat note, with a negative bias, amid profit taking in software major Infosys post its first quarter earnings last week. Sentiments also remained dampened on report that foreign institutional investors sold Indian shares worth 7.23 billion rupees ($120.60 million) on July 11. Traders remained on sidelines ahead of consumer price index (CPI) to be released later in the day. The consumer price inflation probably would have eased to 7.95% last month, down from May’s 8.28%. However, positive global cues and four-month low June WPI data capped the losses. The wholesale price index (WPI) softened to four months low of 5.43% for the month of June as compared to 6.01% in the previous month and 5.16% during the corresponding month of the previous year. The figure was much lower than the expectation of over 5.5%. However, in a negative surprise, April inflation figures were revised upwards to 5.55% from 5.20% earlier. Moreover, build up inflation rate in the financial year so far was 1.28% compared to a build up rate of 1.82% in the corresponding period of the previous year. Global cues remained supportive with European markets trading in the green in early deals, while the Asian markets too ended mostly in the positive terrain. Back home, consumer durables, software and technology counters were the top losing indices. Moreover, gems and jewellery stocks remained under pressure for third day in a row after the government kept gold import duty unchanged at a record 10% in the budget. On the flip side, shares in metal refiners rose with Hindalco Industries settling higher over 4 percent on optimism ahead of China GDP data due on Wednesday. According to estimates, China's economy probably steadied in the second quarter with annual growth holding firm at 7.4%. Additionally, oil marketing companies like BPCl and HPCL edged higher after Brent plunged near the lowest price in three months as Libya’s output persistently kept increasing. Finally, the BSE Sensex lost 17.37 points or 0.07%, to 25006.98, while the CNX Nifty declined by 5.45 points or 0.07%, to 7,454.15.
