The Indian markets once again showed a volatile trade and despite coming off the early slump, ended lower by over half a percent in last session. Today, the start is likely to remain somber as the global cues too are subdued. There will be buzz in the markets with Rajya Sabha clearing the bankruptcy bill, after it was passed by Lok Sabha last week. The bill is expected to further enhance the ease of doing business in the country. Traders will be getting some support with Finance Ministry’s statement amid concerns on how markets will react to the decision taken by India to tax capital gains from Mauritius that India will continue to attract investments because of the inherent strength and the return it offers to investors. Meanwhile, the ministry has also said that Ministry GAAR provisions, which are to take effect from April next year, will override the DTAA provisions in case they are abused. Also, the news of monsoon arriving on time will keep playing its role and support the markets. The PSU oil marketing companies may come under pressure as the global crude prices surged on unexpected fall in US inventory.
There will be lots of result reactions to keep the markets buzzing through the day. Dr Reddy's Labs, Glenmark, Arvind, Manappuram Finance, Nestle India, Merck, MPRL, Polaris, Bank of Maharashtra and Vijaya Bank, are among many to announce their earnings today.
The US markets suffered sharp slump in last session with the major averages largely offsetting previous sessions’ strong gains. Traders cashed in on gains, looking ahead to the release of closely watched reports on retail sales and producer prices later in the week. The Asian markets have made mostly a lower start tailing the US clues, with some indices losing over half a percent in early trade on some disappointing company earnings from Japan to the US. The rebound in yen has weakened the Japanese market.
Back home, Indian benchmark indices snapped two days winning streak and ended lower on Wednesday, on concerns that the government may amend tax treaties with countries, including Singapore, after it agreed to tax capital gains on foreign investments from Mauritius. The tax, which will be effective April 2017, would be at 50 per cent of the domestic rate for two years, and at the full rate thereafter, the government had said on Tuesday. According to reports, Mauritius accounted for 34% of foreign direct investments in India between 2000 and 2015. Besides, weak trend in Asian and European stocks coupled with Indian depreciation in rupee value also weighed on the sentiment. However, market participants got some comfort with the report that India's real agriculture Gross value added (GVA) growth is projected to rise 1.1 per cent in 2015-16, despite below-normal monsoon last year. According to the report, the ongoing diversification in the agriculture sector has reduced volatility in agriculture output and farm incomes. Some support also came with Skymet’s report, stating monsoon would reach Kerala earlier than its due date on June 1. The agency said that the southwest monsoon will arrive over the Andaman and Nicobar Islands between May 18 and 20. It is likely to reach Kerala between May 28 and 30. Thereafter, it will cover other parts of the country. Present weather conditions are indicating a promising beginning of monsoon 2016, which is likely to usher in with a bang. On the global front, Asian markets made mixed closing on Wednesday as investors shrugged off an overnight rally in global stocks, European bourses also snapped previous rally and turned lower. Back home, the benchmark got off to a weak start as the indices breached the psychological 7,800 and 25,450 levels in the early moments of trade since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. However, the key gauges got solid support around the intraday low levels, as they convalesced from thereon. The indices tried hard to move back into the positive territory and even got there but only for a brief period as investors took the opportunity to cash in on the bounce back. Finally, the BSE Sensex declined by 175.51 points or 0.68% to 25597.02, while the CNX Nifty dropped 38.95 points or 0.49% to 7,848.85.
