Markets to get a mildly positive start of the crucial week

The Indian markets paring all their early gains and showing a volatile trend ended flat in last session. Today, the start of the crucial week is likely to be modestly in green, but cautiousness may persist with the Reserve Bank of India slated to release its bimonthly money policy review on Tuesday. Meanwhile, traders will be getting some support with the weak US jobs data, which has lowered the chances of immediate rate hike by the US Fed. Marketmen will also be rejoicing the Met department’s latest report, stating that the conditions continue to remain favourable for the onset of the southwest monsoon over Kerala over the next 2--3 days. Though, there will be some cautiousness too, as a survey from industry body, CII has said that government needs to speed up implementation of GST, address the issue of cheap imports and improve investment climate as majority of sectors are witnessing ‘moderate’ growth. There will be some buzz in the oil & gas stocks, as the government evinced interest in joint exploration of new oil and gas fields as well as development of discovered assets in resource-rich Qatar, as the two countries decided to focus on enhancing cooperation in the energy sector. The chemical stocks too will be in action, as government has imposed anti-dumping duty of $0.277- 0.404 per kilogram on a compound, used in the pharmaceutical industry, imported from the US and China to protect domestic makers from cheap shipments.

The US markets despite recovering from early losses ended modestly lower in last session, after the Labor Department’s highly anticipated monthly jobs report showed much weaker than expected job growth. The Asian markets have made a mixed start and some indices are in red, led by the Japanese markets, as concern over the state of the US economy kept the yen near a one-month high and boosted gold to government debt.

Back home, Indian benchmark indices that started the session on firm note failed to maintain their momentum by the end of the session and ended on flat note, as market participants remained wary ahead of US jobs data that could provide some hints about the timing of the Federal Reserve’s likely move on interest rate hike. On the domestic front, sentiments were undermined after the growth of services activity in India softened for the second straight month in May, as new business inflows expanded at the slowest rate since July 2015. However, investors got some comfort with finance minister Arun Jaitley stating that India will attempt to keep the proposed Goods & Services Tax (GST) rate as moderate as possible and the government will push for passage of the bill introducing the levy in the upcoming monsoon session of Parliament. Some support also came with the India Meteorological Department (IMD) stating that the country is all set to receive above-normal monsoon rains this year with a long-period average of 106 per cent. The Met department said that conditions are becoming favourable for the onset of monsoon and it would hit the Indian coast in the next 4-5 days. On the global front, Asian market ended the week’s final session on positive note, while European stocks traded marginally in the positive range in early deals. Back home, Indian benchmark indices started the session on firm note as traders and foreign funds built long positions, driven by a series of positive factors such as forecast of a normal to excess rainfall this monsoon, robust GDP numbers and encouraging earnings.  However, the bourses failed to capitalize on the early momentum and slipped to lower levels after growth in India`s services industry slowed sharply in May to a six-month low, due to a deceleration in new orders. Finally, the BSE Sensex ended lower by 0.11 points to 26843.03, while the CNX Nifty gained 1.85 points or 0.02% to 8,220.80.