Markets to make a positive start on sanguine global cues

The Indian markets moved higher in last session, putting a brave face on Brexit fears, traders also took encouragement with good progress of monsoon. Today, the penultimate session of the F&O series expiry is likely to be in green on supportive global cues, but there will be bouts of volatility too with traders adjusting their positions ahead of Thursday's F&O expiry. Marketmen will be getting some encouragement with a Reserve Bank of India Financial Stability Report (FSR), stating that despite global uncertainties, banking sector issues, the economy stands out in terms of growth as compared to other emerging markets and the Indian financial system remains stable. Also, the Economic Affairs Secretary Shaktikanta Das has said that India is posed for a “big leap” in growth which could touch 8 percent in the current fiscal on the back of normal monsoon. Regarding volatility in currency and equity markets on account of Britain's exit from the European Union, Das said it would continue for sometime, but India is “well placed” to deal with the situation. Traders will also be eyeing cabinet decision on approve higher increase in basic pay than the nearly 15 percent recommended by the 7th Pay Commission for over 1 crore government employees and pensioners. All the consumer stocks will be in action on a favourable decision of the cabinet.

The US markets coming out of the slump, showed remarkable rebound in last session, bargain hunting along with some positive economic reports supported the market upmove. The Commerce Department reported that economic activity increased faster than previously estimated in the first quarter of 2016.  The Asian markets have made a strong start, with all the indices in the region moving higher, amid rise in oil prices and hopes that policy makers around the world will come up with stimulus measures to blunt the impact of the UK’s decision to leave the European Union.

Back home, showing more firmness in aftermath of Britain’s decision to exit European Union, the Indian markets posted decent gains on Tuesday. Though, there were rounds of volatility too but they were mainly due to the F&O series expiry slated in two days, and the market participants showing their faith and going for value buying took the bourses higher for the day. Earlier, the start was on a cautious note but the markets soon started gaining traction, with the regional peers showing some upmove on hopes of firm measures in the backdrop of Brexit.  Traders also took some encouragement with the report of good monsoon progress and decline in international crude prices. Also, the World Bank’s recently released Global Economic Prospects (GEP) stated that India is seen to grow faster than emerging market peers. It said that India`s push to draw more FDI is also seen to be a positive step. It added that business sentiment is up in India with many startups commencing operations in 2015. More public investment in infrastructure is also seen as a positive which could reduce supply-side restraints. Moreover, markets kept buzzing through the day on reports that the much-anticipated Seventh Pay Commission bonanza for the government employees is likely soon with the Union Cabinet set to consider the panel's recommendations on Wednesday.  On the global front, overcoming the slump in US markets, the Asian markets presented a good show, while the European markets made a positive start. Back home, the markets gained pace in the second half after the European markets made a positive start, getting a halt to the Brexit sell-off. The domestic traders lapped up blue-chip stocks and went for covering shorts. Gradually the rally turned broad based and apart from the bluechips the broader markets too equally participated the rally and by the end outperformed them. Finally, the BSE Sensex ended at 26524.55, up by 121.59 points or 0.46%, while CNX Nifty ended at 8127.85, up by 33.15 points or 0.41%.