Markets to make a positive start after a day of break

The Indian markets after suffering cut of about half a percent in last trading session, took a day of break and the start today is likely to be in green, with bourses showing signs of some recovery after IMD stated that the Southwest monsoon rainfall has shown a marginal rise of one per cent with a good amount of precipitation in several parts of the country for the period between June 1 and July 6. Also, the newly appointed Minister of State for Finance Santosh Gangwar has said that the government is confident of getting the much-delayed GST Bill passed in the upcoming Monsoon session of Parliament, beginning later this month. However, there will be some concern with the US stating India’s growth rate target of 7.5% seems "overstated" due to "depressed investor sentiment" stemming from its failure to implement crucial market reforms, but it lauded Reserve Bank governor Raghuram Rajan for his "monetary stewardship". Meanwhile, the Government has said that it has set up a committee, headed by former CEA Shankar Acharya, to examine the feasibility of having a new financial year, replacing the existing April-March period. The committee, which will submit its report by December, will examine merits and demerits of various dates for commencement of a financial year, including the existing dates (April-March). There will be some buzz in the pharma sector stocks on report that India maintained its supremacy over China in pharmaceutical exports in 2015 with a growth of 7.55 percent to $ 12.54 billion.

The US markets coming off the early decline posted decent gains in last session; traders took comfort from the release of a report from the Institute for Supply Management showing faster than expected growth in the US service sector activity in the month of June. The Asian markets have made a mixed start, though some markets are still closed. The Japanese market was trading weaker, as the yen strengthened for a third day, while some markets are higher taking cues from upbeat US economic data.

Back home, Indian benchmark indices showed a lackadaisical performance on Tuesday as they failed to extend their gaining streak and settled below the neutral line amid weak global cues. Today’s session largely remained characterized by choppiness as the aimless indices oscillated in a very tight range and investors took a breather and resorted to mild profit booking in heavyweights after sharp gains in the previous six sessions. Sentiments came under pressure with the report that growth in India's services firms fell to a seven-month low of 50.3 in June as compared to the previous month of May as new business grew at its slowest pace in the previous 11 months. The Nikkei/Markit Services Purchasing Managers' Index (PMI) cooled for the third straight month in June, having declined to 51 points in May, the weakest since November 2015. Some weakness also came with the Global rating agency Moody's report that stated India's economic growth over the next two years will face challenge from lacklustre global demand and high leverage in some corporate sectors. According to the report, continued high corporate leverage, low nominal domestic growth and lack of corporate pricing power, will hold back investment activity for at least several quarters. However, investors got some comfort with Finance Minister Arun Jaitley’s statement, who calling India a 'sweet spot' in the subdued global economy said that indication of “good rains” will further boost the country’s growth momentum. Also, the increase in intensity and coverage of rainfall over the past weekend resulted into a sharp decline in the deficit so far this monsoon season. On the global front, Asian markets ended mostly in red on Tuesday, while European stocks fell. Back home, the local benchmark indices started the session on a somber note, investors largely remained influenced by the daunting sentiments prevailing in Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Finally, the BSE Sensex ended lower by 111.89 points or 0.41% to 27166.87, while the CNX Nifty dropped 34.75 points or 0.42% to 8,335.95. Indian markets remained closed on Wednesday on account of Eid-ul-Fitr.