Markets to extend the gaining momentum with a green start

The Indian markets extending their gains went for a rally in last session and ended higher by about a percent, supported by broad based buying on some upbeat macro data. Today, the start is likely to be in green, though some consolidation can be seen in latter part of the trade. Marketmen will be getting some encouragement in early trade with Finance Minister Arun Jaitley’s statement that India is no longer satisfied being in the 6 to 8 percent growth. It wants to transcend to another level and aim for 8 to 10 percent growth. Also, with Skymet maintaining a normal monsoon forecast, has predicted July rainfall to be 104 percent of Long Period Average. It has also said that July rains may get bumper harvest. The IT and tech stocks are likely to remain in action with Prime Minister Narendra Modi launching the “Digital India Week”, with Rs 4.5 lakh crore investment being committed for Digital India and employment for 18 lakh people. The larger goal of Digital India includes broadband connectivity in all panchayats, Wi-fi in all the schools and universities and public wi-fi hotspots in all important cities by 2019. The auto stocks will remain in action reacting to their monthly sales numbers, with the sector continuing to show mixed performance in June.

The US markets bounced back and ended with good gains in last session, in a positive reaction to the latest news about Greece as well as some upbeat US economic data. Greek Prime Minister Alexis Tsipras sent a letter indicating he will accept most of the demands made by the country's creditors. The Asian markets have made mostly a positive start and were trading higher, led by Japan as the dollar maintained gains against the yen before US jobs data. The Chinese market was still in somber mood after the nation eased margin-trading rules along with equity-transaction fees.

Back home, boisterous benchmarks showcased an enthusiastic performance on Wednesday, by rallying over one percentage point amid strong global cues coupled with positive macro economic data. Sentiments remained up-beat since start as key bourses opened with decent gains and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only ended the session nearly two and a half months high levels but also recaptured their crucial 8,450 (Nifty) and 28,000 (Sensex) bastions as investors took to hefty across the board buying. Traders’ confidence got some boost from report that Growth in production in the eight key infrastructure sectors hit a six-month high of 4.4% in May, after two consecutive months of decline, indicating a recovery in industrial activity. The index of these eight core sectors grew 3.8% in the corresponding month last year. Some support also came with revenue secretary’s statement that the preparatory arrangements are in place to implement Goods and Services Tax from April 2016. Investors shrugged off weak purchasing managers’ index (PMI) data. Growth in the country’s manufacturing activities slowed down at 51.3 points in June from 52.6 points in May as new business orders were not as forthcoming. Meanwhile, Indian corporate leaders have urged Prime Minister Narendra Modi to take steps to further reduce the cost of capital to help boost manufacturing in the country and generate consumer demand. Global cues too remained supportive with European counters trading in green in early deals, while Asian markets ended mostly in green. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Buying in banking counter too aided sentiments after the Government's plan of a comprehensive package raised hopes of faster recapitalisation. Finally, the BSE Sensex surged by 240.04 points or 0.86% to 28020.87, while the CNX Nifty soared by 84.55 points or 1.01% to 8453.05.