The Indian markets after a volatile session of trade closed modestly in red. Today, the start is likely to remain somber, as there is not much improvement in the global trends and lacking any supportive cues Nifty that has created to a new calendar year closing low in last session may slip further retesting the crucial 8000 mark. Traders will get some support with report that pitching for a better ranking on ease of doing business for India, government officials have apprised the World Bank about various reform measures taken in the past one year including relaxation in company laws. A two-member mission of the World Bank Group is visiting India to collect data and information for Doing Business Report, 2016. The oil & gas sector will be in action, as the Finance Ministry has returned an Oil Ministry proposal to allow market price for part of the natural gas produced by firms from difficult fields. The logistics companies too are likely to be buzzing with the rating agency Crisil stating that the implementation of GST will help reduce logistics costs for companies by up to 30 percent over 3-4 years due to savings in warehousing cost and elimination of check-posts.
The US markets made a flat closing after a choppy trade, there was some concern with Commerce Department revealing that wholesale inventories rose 0.4 percent in April compared to the previous month. The Asian markets have made a mixed start, though some of the indices have recovered from their initial losses but the Chinese market was still trading lower after MSCI Inc. held off from adding mainland equities to its benchmark indexes.
Back home, prolonging their southward moment for sixth straight session, Indian equity benchmarks ended the volatile day of trade at their lowest levels in almost 5 weeks with key gauges breaching their crucial 26,500 (Sensex) and 8,050 (Nifty) levels, albeit by small margins. It was a choppy day of trade where markets swung between negative and positive terrain throughout the session, as investors opted a cautious approach ahead of key macro data slated to be announced later in the week. Overall sentiments remained down-beat after Moody’s said a weak monsoon is likely to be credit-negative for India as it is expected to push up food inflation as well as government deficits. IMD had revised its monsoon forecast for 2015 from below normal to deficit. Meanwhile, Prime Minister Narendra Modi has said that India must quickly expand its irrigation network and improve water usage to offset the impact of less monsoon rainfall than usual, while Agriculture Minister Radha Mohan Singh said that sustaining 4 percent growth in the farm sector is a challenging task though it remains one of the top priorities of the government. However, some support came after Paris-based think tank Organisation for Economic Cooperation and Development (OECD) has said that Indian economy is witnessing “stable growth momentum” and mixed trends are seen in other parts of the world including China and the US. Pegging the growth rate at 7.4 percent for 2016, the OECD said that decline in oil prices would reduce pressures on the current account deficit, inflation and subsidies. Global cues too remained sluggish with European counters trading lower in early deals, while Asian markets making a weak closing. Back home, selling in realty counter too weighed on sentiments, led by Unitech which plunged around 8% after the National Consumer Disputes Redressal Commission (NCDRC) asked the real estate major to pay buyers compensation at the rate of 12% per annum for delay in delivery of flats. Finally, the BSE Sensex lost 41.84 points or 0.16% to 26481.25, while the CNX Nifty declined by 21.75 points or 0.27% to 8,022.40.
