Markets likely to get a flat-to-green start

The Indian markets bucking the global trends, made a smart turnaround in last session to end higher by around half a percent. Today, the start is likely to be flat with a positive bias and the markets will extend the gains. Traders will be getting some support with the government dismissing the possibility of any material impact on the Indian economy from the developments in Greece, but it anticipates some impact on the rupee from investors pulling out in fear. Commerce and Industry Minister Nirmala Sitharaman has said that the government is “very closely” monitoring the developments in Greece as that could have implications on the international currency market. PSU banks will continue to see some pressure, with Fitch Ratings' statement that challenges for state-owned banks remain despite improving macro picture. There will be some cheer in export oriented stocks, as the Finance Minister Arun Jaitley has assured exporters of timely payment of tax refund and promised steps to boost shipments. Shares of Indian firms with significant exposure in Europe will continue to remain in pressure.

The US markets ended lower in last session, coming out of a long weekend and reacting negatively to the outcome of the weekend's referendum in Greece. However, there was good news from the economy front, with activities in the service sector expanding at a modestly faster rate in the month of June. The Asian markets have made mixed start with some of the indices trading in green considering the Greek sell-off overdone and being led by Japanese market which is advancing for the fifth day in six.

Back home, shrugging off feeble global cues, Indian equity benchmarks staged a smart recovery in second half of trade and ended the session with a gain of around half a percent on Monday, supported by short-covering in beaten down but fundamentally strong stocks. Earlier, markets made gap down opening and extended their downfall to touch intraday lows with result of Greek voters rejecting more austerity demands from creditors, fuelled fears that the country will crash out of the Eurozone and has weighed heavily on the equity markets across the globe, triggering selling by participants. Sentiments also remained dampened on report that the Goods and Services Tax (GST) Bill is unlikely to be taken up in the coming monsoon session of Parliament, as the Congress members on the joint parliamentary panel on GST are likely to submit dissent notes against the panel’s report to be submitted on July 17. The indices even went on to test important psychological 27,800 (Sensex) and 8,400 (Nifty) levels, but the key gauges got solid support around those intraday low levels as they convalesced from thereon. Sentiments turned up-beat with World Bank’s saying that India’s economy has crossed the $2-trillion mark in 2014 and currently stands at $2.067 trillion. While it took 60 years to reach $1-trillion mark, in just 7 years it added one trillion to its economy, which has doubled in size since the financial crisis hit the country in 2008.On the global front, European counters traded in red in early deals, while Asian markets ended mostly in red. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline indices managed to settle near intraday high levels with Sensex and Nifty recapturing their crucial 8,500 (Nifty) and 28,200 (Sensex) levels, highest after April 17. Finally, the BSE Sensex surged by 115.97 points or 0.41% to 28208.76, while the CNX Nifty gained 37.25 points or 0.44% to 8522.15.