The Indian markets surged in last session adding around one and half a percent, backed by broad based buying and on hopes of some good macro data. Today, the start is likely to be subdued and the traders will be reacting to the double jolt of retail inflation rising in July by 50 basis points at 7.96% and index of industrial production unexpectedly slowing to 3.4%, as against the previous month's 4.7%. Though, the retail inflation was expected to rise on high food prices in vegetables, fruits and pulses, the industrial production was expected to improve, but its decline may add to the pessimism on the street. Traders will also be cautious with the government downgrading rain forecast, as the India meteorological department (IMD) forecast that the June-September monsoon, vital for kharif crops, would be 87 per cent of the long-term average, however it has ruled out drought. There will be some solace with the global rating agency Moody's estimates that the country's GDP will grow by 5 percent this year and accelerate further in 2015. Also, the Finance Ministry has said that discussions with the state governments on Goods and Service Tax (GST) are in the final stages and its implementation will help improve transparency and efficiency. There will be some buzz in the media related stocks, with broadcast regulator Trai suggesting restriction on political bodies and corporates entering the television and newspaper business.
The US markets ended modestly lower in last session on lingering geopolitical concerns amid a focus on developments in Ukraine. The Asian markets have made a flat but positive start and the regional indices were trading cautiously awaiting economic data from China, meanwhile the Japanese market was modestly in green despite report the nation’s economy contracted an annualized 6.8 percent in the three months through June.
Back home, extending their previous session’s jubilation, Indian equity benchmarks ended the Tuesday’s trade with a gain of around one and a half percent with frontline gauges ending at one week high levels, recapturing their crucial 25,850 (Sensex) and 7,700 (Nifty) bastions. Barometer gauges, after a positive start, traded in tight band throughout the session, while buying in last leg of trade took the benchmark equity indices to-day’s high point. Easing geopolitical tensions and hopes of encouraging index of industrial production (IIP) numbers for June to be released later today mainly buoyed the domestic sentiment. IIP data is expected to be strong in the final month of the quarter, as indicated by good core sector data. Investors would be also eyeing combined consumer price index (CPI) data for July 2014 which is expected to rise marginally to 7.40% from 7.31% in June. Sentiments also remained up-beat after Paris-based think tank Organisation for Economic Cooperation and Development (OECD) said that India’s economic growth is gaining momentum and the country is poised for better growth. Meanwhile, Finance Minister Arun Jaitley has said that Rs 6.23 lakh crore indirect taxes collection target for the current fiscal is a challenging one but efforts are on to achieve the same by taking steps to boost growth. On the global front, Asian markets ended mostly in the green terrain, however the European markets made a soft start. Back home, appreciation in Indian rupee aided the sentiments. The rupee was trading at 61.10 per dollar at the time of equity markets closing as compared to 61.19 per dollar level on Monday. Meanwhile, rally in oil and gas sector too supported the sentiments as global crude oil prices declined. Better-than-expected Q1 numbers from BPCL, IOC and Oil India too spelled optimism across entire oil and gas pivotal. Auto space too rallied led by Tata Motors, which jumped more than 6% after strong sales of its luxury Jaguar and Land Rover vehicles helped triple the company's first-quarter net profit. Additionally, stocks related to power space too edged higher, as the government has said that, as many as 29 hydro power projects with an overall capacity of 10,000 MW are awaiting appraisal from the Central Water Commission. Finally, the BSE Sensex surged by 361.53 points or 1.42%, to 25880.77, while the CNX Nifty soared by 101.10 points or 1.33% to 7,727.05.
