Markets to make a cautious but positive start

The Indian markets closed with a negative bias in the last session after a choppy trade. Today the start is likely to be flat-to-positive on sanguine global cues and the markets will be getting some encouragement with global rating agency Standard and Poor's expectations of a stable trend in sovereign credit rating in Asia-Pacific nations, including India, despite growing economic uncertainties. Also, Finance Minister Arun Jaitley has said that the Centre was planning to spend Rs 50,000 crore on the farming and irrigation sector and plans were also afoot to roll out an insurance scheme exclusively for the farming sector to compensate for crop loss. There will be some buzz in the India Inc, with Commerce and industry minister Nirmala Sitharaman discussing the ecommerce policy framework with state industry ministers in a meeting to explore the possibility of allowing foreign direct investments in consumer ecommerce. Some action will be seen in the realty stocks based around central capital, as the Centre has approved a Transit Oriented Development policy for the capital, allowing construction projects, along various mass-transit corridors, to go higher vertically. There will be lots of important result announcements too, to keep the markets buzzing.

The US markets extending their gains ended higher in last session, with the major averages closing higher for the fourth consecutive session. Traders even ignored the Commerce Department’s report showing an unexpected drop in retail sales in the month of June. The Asian markets have made mostly a positive start, barring the mainland Chinese markets, even though the Chinese gross domestic product expanded 7 percent in the second quarter from a year earlier, beating estimates for a 6.8 percent increase.

Back home, Indian equity benchmarks ended the volatile day of trade in red terrain on Tuesday with marginal losses, as higher-than-expected consumer price inflation (CPI) data for June dampened the hopes of a rate-cut by the Reserve Bank of India (RBI). CPI inflation rate for June rose to 5.4 per cent, higher than the estimated 5.1 per cent. Sentiments also remained down-beat with India Ratings calling for continuous government interventions to fill the deficits in physical and social infrastructure spaces for long-term higher growth, despite retaining its 7.7 per cent growth forecast for this year. It also warned that full-blown investment recovery is still some 12-18 months away primarily because of the low capacity utilisation in the manufacturing sector. However, losses remained capped after the wholesale price index-(WPI) based inflation fell to -2.4 percent lower than previous month’s number of -2.35 percent and 5.66 percent during the corresponding month of the previous year. Some support also came with report that Iran and six major powers have clinched a historic nuclear deal, which includes a compromise between Washington and Tehran that would allow UN inspectors to press for visits to Iranian military sites as part of their monitoring duties, the deal could eventually reshape global oil markets. Iranian Oil Minister Bijan Namdar Zanganeh has said that the country can increase exports by 500,000 barrels a day as soon as sanctions are lifted. On the global front, European counters trading in red I n early deals, while Asian markets ended mostly in green. Back home, Appreciation in Indian rupee too aided sentiment. Shares related to public sector oil marketing companies (PSU OMCs) edged higher as crude oil prices edged lower. However, rate sensitive counters viz. banking, auto and realty remained under pressure on rate cut pause worries. Finally, the BSE Sensex declined by 28.29 points or 0.10% to 27932.90, while the CNX Nifty lost 5.55 points or 0.07% to 8454.10.