Markets to get a flat-to-cautious start lacking any major cues

The Indian markets consolidated in last session and ended with loss of around a quarter percent. Today, the start is likely to be cautious and the consolidation mood may extend lacking any major cues. However, traders will be getting some support with RBI Governor Raghuram Rajan’s statement that capital investments are picking up but a stronger growth would require more reforms and clearing bottlenecks for stalled projects. Inflation wary investors too will be getting some respite with government stating that it will not allow prices of essential food items to increase due to the impact of possible deficient monsoon this year. Some buzz will be seen in the infra stocks with Prime Minister Narendra Modi while reviewing the progress of highway construction in the North-East, asked officials to ensure good connectivity between the new road projects and nearby airports. Some cheers can be seen on PSU oil marketing companies, with CEA Arvind Subramanian stating that sales of subsidised LPG cylinders under the Direct Benefit Transfer scheme (DBT) have come down by about 25 percent.

The US markets ended flat in last session, with traders reluctant to make any significant moves going into the long weekend. Also, as the Labor Department said non-farm payroll employment increased by 223,000 jobs in June, lower than expected. The Asian markets have made mostly a positive start, though the Chinese market has plunged again, headed for the biggest three-week loss in 22 years as government efforts to quell the rout failed.

Back home, Thursday’s session turned out to be a disappointing day of trade for Indian equity benchmarks where frontline gauges witnessed choppiness and ended in red terrain, as investors remained cautious ahead of Greece referendum on bailout proposal and US non-farm payrolls data to be released later in the day. Sentiments remained down-beat with global rating agency Fitch lowering India's economic growth projections to 7.8 percent for the current fiscal from 8 percent on pickup in demand and said that the country’s business environment is relatively weak compared with peers and will take time to turn around. After a range-bound session, markets slipped in the negative territory in last leg of trade owing to weakness in the Index heavyweights. Meanwhile, the mood remained skittish after hopes of a last minute deal between Athens and the euro zone dampened. However, losses remained capped 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.  Some support also came after India Meteorological Department (IMD) reported better than normal monsoon figure in the month of June. Besides, revival of buying by foreign funds after remaining sellers for several sessions, too capped losses. On the global front, European markets made a positive start, while the Asian markets ended mostly in the green. Back home, the PSU banking stocks extended their jubilation with the Minister of State for Finance Jayant Sinha stating that more capital support will be given to public sector banks, which need an additional Rs 2.40 lakh crore in the next three years to meet Basel III capital adequacy norms. He also acknowledged regulatory issues in listing of stock exchanges, saying the matter is under consideration. Finally, the BSE Sensex declined by 75.07 points or 0.27% to 27945.80, while the CNX Nifty lost 8.15 points or 0.10% to 8444.90.