Markets to continue the gaining momentum with a positive start

The Indian markets returned to the jubilation mood and moved higher in the last session after a day of mild consolidation. Today, the start is likely to be good on euphoric global cues and supported by the better than expected Q1 numbers from IT bellwether TCS. The company reported a 9.4% rise in net profit during the first quarter, after new cloud computing and mobile services helped shore up revenue. Today, all eyes will be on other two major result announcements of Infosys and Reliance Industries. Marketmen will also be getting some support with report that Monsoon rains in India were 11 per cent above average in the week ended July 13. The June-September monsoon has so far delivered 4 percent higher rainfall than average. Markets will keep buzzing with the government extending the deadline for payment of tax and penalty under the black money disclosure scheme and allowing declarants to pay the amount in three installments by September 30 next year. There will be some cautiousness too, and some impact of European markets can be seen later in the day, as the Bank of England kept interest rates on hold on Thursday, but held out the prospect of a stimulus package soon to help the economy. The export oriented stocks will be in action, as the Commerce and Industry Minister Nirmala Sitharaman has said that Decline in exports have bottomed out and the outbound shipments are expected to witness gradual improvement in the coming months depending upon pick up in global demand.

The US markets strengthened further in last session and the Dow and the S&P 500 reached to new record closing highs on continued optimism about additional monetary stimulus from central banks. The Asian markets have made a positive start, with Chinese economic data beating estimates. China’s GDP increased 6.7 percent from a year earlier in the second quarter. Growth in factory output and retail sales also beat estimates. The Japanese equities too rallied as the yen fell on prospects for stimulus.

Back home, a session after displaying a distressing performance, Indian benchmark indices managed to pull through a scintillating performance by vivaciously rallying over half a percent on Thursday,  as investors turned cheerful after reports of talks between the Congress and the government fuelled hopes that the crucial Goods and Services Tax (GST) Bill is likely to be passed soon. Further, Union Minister Nitin Gadkari also expressed confidence that the crucial Goods and Services Tax (GST) Bill will be passed in the coming Monsoon session of Parliament as he touted the various reform measures implemented by the government to boost economic growth and attract billions of dollars of foreign investment and technical expertise across sectors. Besides, appreciation in Indian rupee too aided sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 290.53 crore on July 13, 2016. However, gains remained capped with the hardening of the WPI index follows an uptick in retail inflation, which hit a 22-month high of 5.77 per cent in June, dampening chances of a rate cut by RBI at its next policy meet scheduled for August 9, 2016.  Wholesale price index-based inflation accelerated for the third straight month in June hitting 1.62 per cent on costlier food and manufactured items. On the global front, Asian markets ended mixed on Thursday, as investors remained cautious ahead of a Bank of England meeting and Friday's release of China's GDP data. However, European stocks rallied in early trade. Back home, Indian market got off to a soft start as the indices showed signs of consolidation in early trade, ahead of quarterly corporate results and an expected government announcement on who would take over as the country's next central bank chief. Short covering intensified in late hours of trade which stoked the bourses to the highest point in the session. Finally, the BSE Sensex surged 126.93 points or 0.46% to 27942.11, while the CNX Nifty rose 45.50 points or 0.53% to 8,565.00.