The Indian markets snapped the month on a higher note before going for a long weekend, although traders were a bit cautious ahead of some crucial economic data. Today, the start is likely to be mildly in green and traders will be reacting to the report that India's economic growth accelerated to two-and-half year high of 5.7 per cent in the April-June quarter on the back of improvement in mining, manufacturing and services sector performance. Traders are also likely to get some support with Reserve Bank of India Governor Raghuram Rajan statement that India is now better prepared to handle the impact of any US interest rate increase because of signs its economy is improving. There will be some action in textile stocks, as the Minister of State for Textiles has said that the Union government would soon come out with a national textile policy. The Ministry also said that new textile parks would be set up at the earliest. The PSU oil marketing companies too will be in action as Petrol price has been cut by Rs 1.82 a litre, the third reduction in rates the passing month, while diesel rates were hiked by 50 paise per litre. The Auto and cement stocks will be announcing their monthly sales numbers and will show performance based action.
The US markets ended higher on Friday with the S&P 500 setting all-time highs above the 2,000 milestone. There were slew of positive economic data that supported the markets for the day. The Asian markets have made mostly a positive start as traders in the region weighed the prospect of stimulus by the Chinese policy makers after reports of slower manufacturing growth.
Back home, Indian stock markets closed the August futures and options series on a strong note with a massive gain of around three percent. Moreover, the expiry session turned out to be a fabulous day of trade for the Indian equity markets, which scaled fresh all time closing highs for yet another session amid sustained foreign fund inflow. The markets, on the August F&O expiry day, remained remarkably steady with Sensex confining itself to a range of around 100 points. Though, some volatility was witnessed in last leg of trade but frontline gauges managed to log their new all time closing highs. Overall, sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the General Anti Avoidance Rules (GAAR) were being revisited and that a decision would be taken soon, adding that the date of GAAR coming into force would also be looked at afresh. India Inc also cheered the announcement of Reserve Bank of India (RBI) simplifying external commercial borrowing (ECB) norms. The central bank also allowed companies to raise fresh funds through ECBs where the average maturity period (AMP) exceeds the residual maturity of the existing ECB under automatic route, with certain riders. However, gains remained capped on Moody’s report stating India’s sovereign ratings are constrained by persistently high inflation that is weighing on an otherwise promising economic recovery. Further, caution ahead of the release of Q1FY15 GDP data and possibly even Current Account Deficit (CAD) numbers later this week, also underpinned investors to be on the sidelines. On the global front, European markets traded in the red in early deals, while Asian markets ended mostly in the red. Back home, sentiments remained up-beat on report that foreign institutional investors remained aggressive buyers in Indian equities infusing around Rs 77,684 crore in the past seven months since February and Rs 6,408 crore for this month till August 26, as per regulatory data. Meanwhile, public sector oil marketing companies (OMCs) gained after the government removed the restriction of one subsidized LPG cylinder per month for each consumer. The restriction of 12 subsidized cylinders per consumer per annum continues. Additionally, railway-related stocks edged higher after the government notified the liberalised foreign direct investment (FDI) norms for rail infrastructure, allowing 100% FDI through automatic route in the sector. Finally, the BSE Sensex surged by 77.96 points or 0.29%, to 26638.11, while the CNX Nifty gained 18.30 points or 0.23% to 7,954.35.
