The Indian markets turned choppy and gave up some gains in last session after trading higher for eight consecutive days. Today, the start of the crucial F&O expiry week is likely to be cautious but in green. Traders will be getting some support from International Monetary Fund’s (IMF) statement that growth appears to have bottomed out in India and activity is projected to pick up gradually after the post-election recovery in business sentiment, neutralising the effect of weak monsoon on agriculture. Also, there are reports that armed with budget proposals to bring down the fiscal deficit, the Finance Ministry will pitch for a ratings upgrade at a series of meetings with the global agencies in the coming 2-3 months. Infra stocks are likely to remain in action, as the Prime Minister Narendra Modi has met secretaries of nine infrastructure ministries to set targets for 2014-15 and identify key projects in sectors like road, power and railways. Textile stocks too will be buzzing as the Textiles Ministry has not revised the export target of $45 billion for textile products in the current fiscal.
There will be lots of result reaction of numbers announced during weekend and of those to be announced today. Alembic Pharma, Bank of Baroda, Dabur India, Delta Corp, Havells India, Hindustan Unilever, Lanco Industries, Larsen & Tourbo, Praj Industries, Tata Global Beverages, Tinplate Company of India, Torrent Power, UPL and Vijaya Bank will report their numbers today.
The US markets made a soft closing on last trading session after getting some weak earnings, while geopolitical concerns also continued to weigh on the markets amid ongoing conflicts in Ukraine and Gaza. The Asian markets have made mostly a positive start on getting good economic data from China, as profits at industrial companies in Asia’s largest economy increased by 17.9 percent in June from a year earlier.
Back home, snapping their eight-day winning streak, Indian equity benchmarks ended sluggish day of trade with a cut of over half a percent as investors opted to book profits after markets hit fresh all-time highs in the previous session. Continued unrest in the Middle East and Ukraine mainly dampened the sentiments of market participants, while lower than expected Q1 FY15 earning from Wipro too upset investors. In dollar terms, IT services revenue was $1,740 million, a sequential increase of 1.2%. Moreover, the company’s operating margin of IT services declined to 22.8%, from 24.5% in the previous quarter, impacted due to wage hikes. Sentiments also remained down-beat after Reserve Bank of India official stated that India continues to face threats on the growth and external sector fronts. Also, there was report that indirect tax collections inched up by 4.5 percent in the April-June quarter of the current fiscal, much lower than 25 percent increase envisaged in the Budget for the full 2014-15 fiscal, due to decline in custom duty and excise duty collections. Meanwhile, Finance Minister Arun Jaitley ended retrospectivity in higher capital gains tax on debt mutual funds, but only for redemptions made between 1 April to 10 July. Jaitley, however, defended the budget proposal to impose higher capital gains tax, saying the facility was used by corporates mainly for arbitrage. Selling got intensified after European markets made a choppy start, though, Asian markets ended mostly in the green. Back home, disappointing Q1 earning from Indian bank, Allahabad Bank, Colgate Palmolive, Shriram Transport Finance Company too dampened the sentiments. Meanwhile, retail Stocks like Trent, Shoppers Stop and Future Retail edged lower after trade minister Nirmala Sitharaman asserted that government has not decided its stance on a policy in place to allow foreign direct investment in supermarkets. Moreover, shares of jewellery retailers too ended lower after government underscored that it does not have any current proposal to cut the record 10% import duty on gold. Finally, the BSE Sensex plunged by 145.10 points or 0.55%, to 26126.75, while the CNX Nifty declined by 40.15 points or 0.51%, to 7,790.45.
