Markets to make a soft start tailing weak global cues

The Indian markets trading in a range and witnessing choppiness in the final hours managed to close modestly in green in the last session. Today, the start of the day is likely to be soft tailing the weakness in the global indices. Markets may get some support with Economic Affairs Secretary Shaktikanta Das’ statement that the Finance Ministry is hoping that the prices of pulses will now be contained and help keep inflation under check due to the higher minimum support price for pulses. Also, on report from rating agency CRISIL that India Inc is expected to see a two-year high growth rate of eight per cent in revenue during this financial year’s first quarter ended June 30, mainly driven by export-oriented units like information technology sector. There will be some buzz in the power sector stocks, as the Power Minister Piyush Goyal has said that his ministry is experimenting with a technology, brown-out, which can provide some power backup to households in the event of a grid failure leading to blackouts. PSU oil marketing companies are likely to gain with global crude prices slumping more than 4 per cent after the US government reported that a drop in weekly crude stockpiles.

The US markets made a mixed closing in last session following a lackluster day of trade, as the major averages kept bouncing back and forth across the neutral line with prevailing cautiousness ahead of the monthly jobs report on Friday. The Asian markets have made a soft start and some of the indices in the region are down by around a percent in early deals, as the crude traded near two months low and shifted focus to Friday’s key US jobs data for gauging the rate hike chances.

Back home, it was another lackadaisical performance from the Indian benchmark indices on Thursday, as they failed to gain ground and settled marginally above the neutral line. The key indices oscillated in an extremely tight range through the session as market participants remained on the sidelines lacking conviction amid the persistent worries over global financial stability. The sentiments took support from positive developments from the Southwest monsoon rains that showed 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, 2016. Also, Food Minister Ram Vilas Paswan said pulse production could increase by 18 per cent to 20 million tonnes this crop year on better monsoon which would help bring down retail prices and ease some pressure from inflation. Some support also came with the newly appointed Minister of State for Finance Santosh Gangwar’s statement 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, gains remained capped with the US stating that 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'. On the global front, Asian stock markets ended mixed on Thursday, while all major European stock markets traded with firm gains in early deals. Back home, the Indian equity indices made cautious start despite positive close of US markets overnight, as investors preferred staying on the sidelines as they lacked conviction for the strength of the market. Thereafter, the indices kept oscillating in a narrow range through the day’s trade. Finally, the BSE Sensex gained 34.62 points or 0.13% to 27201.49, while the CNX Nifty was tad higher by 1.95 points or 0.02% to 8,337.90.