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

The Indian markets bounced back in last session and despite some late hour choppiness managed a close of good gains. Today, the start is likely to be flat-to-positive, though the mixed trend in the regional peers are likely to cap the gains but after some stabilisation upmove can be expected with Nifty approaching 8600 mark. Traders will be getting some encouragement with RBI Governor Raghuram Rajan’s statement that the central bank will cut interest rate provided it feels confident that inflation will remain below 6 percent even after the reduction. Markets will also be getting some support with government’s proposals for big investments of Rs 30,552.45 crore, pertaining to sectors such as pharmaceuticals, information & broadcasting, insurance, non-banking finance companies and private banks. PSU stocks will be buzzing, as the government has said that public sector undertakings in pharmaceuticals sector will not be sold but their assets will be leveraged to make them financially viable. The IT stocks are likely to be in action and may see some recovery, taking cues from the earnings of the US-headquartered Cognizant Technology Solutions, which reported a 6% sequential growth in revenues for the June quarter and also raised its annual guidance. 

The US markets made mostly a positive close in last session, though major averages pulled back from highs of the day ahead of the monthly employment report. Though, a report from payroll processor ADP showed that the pace of private sector job growth slowed by more than expected in July and eased some concern about interest rate hike. The Asian markets have made a mixed start and some of the indices were trading in red on bets the Federal Reserve will boost interest rates as soon as next month, though the Japanese market gained, set for an eight-year high.

Back home, resuming their northward journey, Indian equity benchmarks ended the Wednesday’s trade with a gain of over half a percent with frontline gauges recapturing their crucial 8,550 (Nifty) and 28,200 (Sensex) levels. Markets after a gap-up opening traded in a very tight-band throughout the session, though mild profit booking was witnessed in last leg of trade. Sentiment remained up-beat on report that the central bank retained its growth forecast of 7.6% for the financial year ending March 2016, citing a gradually improving outlook on the back of better real income from the decline in commodity prices and likelihood of better agricultural income if the monsoon continues to improve. Some support also came with report that the Indian services industry bouncing back to growth in July, although the rate of expansion was only marginal, the seasonally adjusted Nikkei Services Business Activity Index rose back above the 50.0 no-change mark in July, posting 50.8 from 47.7 in June. Foreign traders were encouraged on some reports that as per the recommendations of Justice AP Shah-led three-member committee on minimum alternative tax (MAT), foreign investor is not liable to pay MAT prior to April 1, 2015. Global cues too remained supportive with European counters making a firm start, while Asian markets ended mostly in green. Back home, better-than-expected Q1 earnings by Bharti Airtel buoyed the sentiment. The company has reported 40.22% rise in its consolidated net profit after minority interest of Rs 1554.30 crore for the quarter ended June 30, 2015 as compared to Rs 1108.50 crore for the same quarter in the previous year. Finally, the BSE Sensex surged by 115.15 points or 0.54% to 28223.08, while the CNX Nifty gained 51.05 points or 0.60% to 8567.95.