Markets to make a flat-to-positive start on mixed global cues

The Indian markets went for a rally in last session with benchmarks reclaiming many of their psychological levels, supported by good buying in the high beta blue-chip stocks. Today, the start is likely to be in green and markets will be moving up albeit with a slower pace than the previous day. There will be some cautiousness with reports of India’s exports dipping further by 15.8 per cent in June to $22.28 billion, marking the seventh straight month of contraction, though imports too fell by 13.40 per cent to $33.1 billion. Meanwhile, Petroleum Minister Dharmendra Pradhan has said that International oil prices will come down with the imminent lifting of sanctions against Iran and benefit India, though he also said that the development will put some pressure on exploration and production (E&P) business due to low returns. There will be some buzz in the PSU oil marketing companies, as Petrol and diesel prices have been cut by Rs 2 per litre, excluding local levies, in the second reduction by oil companies this month. Pharma stocks too may see some action, as the Supreme Court has asked the government to review its market-based drug pricing policy within six months.

The US markets ended modestly lower in last session after a lackluster trade and benchmarks kept moving in and out of the red on trepidation ahead of a Greek parliament vote on the conditional bailout agreement, and remarks by Federal Reserve Chair Janet Yellen that it would be appropriate to raise interest rates before year-end if the economy evolves as expected. The Asian markets have made a mixed start, though some of the indices were trading marginally in red but many have extended their gains after Greece’s parliament endorsed the fresh set of austerity measures.

Back home, boisterous benchmarks showcased an enthusiastic performance on Wednesday, by rallying around a percentage point. Sentiments remained up-beat since start as key bourses opened on a positive note 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 near intraday high levels but also recaptured their crucial 8,500 (Nifty) and 28,150 (Sensex) bastions as investors took to hefty across the board buying. Sentiments remained jubilant with global rating agency Standard and Poor’s (S&P) latest report, expecting a stable trend in sovereign credit rating in Asia-Pacific nations, including India, despite growing economic uncertainties. In its mid-year review of the Asia-Pacific region, S&P retained India’s sovereign rating at ‘BBB-' with stable outlook as originally mentioned in its report in September 2014. Some support also came with Finance Minister Arun Jaitley’s statement 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. Meanwhile, Prime Minister Narendra Modi will be launching the National Skill Mission in an effort to create a large pool of skilled workforce required to sustain his ambitious ‘Make in India’ initiative. The mission is aimed at roping in 24 lakh youth, across India, over the next one year. On the global front, European markets traded 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. Stocks related to software and technology counters too edged higher despite rupee appreciation after the Greek deal. Additionally, shares of companies engaged in education software and vocational training institutes also remained on buyers’ radar on hopes that Prime Minister Narendra Modi's 'Skill India' initiative may change the fortune of these companies. Finally, the BSE Sensex surged by 265.39 points or 0.95% to 28198.29, while the CNX Nifty soared by 69.70 points or 0.82% to 8523.80.