Markets to get a positive but cautious start, IT stocks eyed ahead of Wipro earnings

The Indian markets gave up all the gains in final hours of last session and lost over quarter of a percent. Today, the start is likely to remain positive but cautious on mixed regional cues, though there can be recovery too with the global rating agency reaffirming India's 'BBB-' rating with a stable outlook, while saying it would produce a 7.7 per cent growth rate for FY2017. However, Fitch expressed concern over deteriorating private investment and the still weak fiscal position. Meanwhile, the global financial services major Morgan Stanley too has revised upwards its India growth estimate for this year to 7.7 percent from 7.5 percent earlier, because of 'positive surprises' in the macro data. Chief economic adviser (CEA) to the finance ministry Arvind Subramanian has said that the Indian economy can grow at more than 8 per cent in the next decade if global economic environment remains supportive. IT stocks once again be in focus with another bellwether Wipro announcing its numbers later in the day and is expected to report weak earnings hurt by wage hike. There will be other major important earnings too to keep the markets buzzing.

The US markets despite a subdued trading, ended modestly higher in the last session. With the Dow and the S&P 500 surging to new record closing highs on upbeat earnings news from financial giant Bank of America., though there was unexpected drop in homebuilder confidence in the month of July. The Asian markets have made mostly a lower start with some indices trading down by around half a percent, retreating from their highest level since April as oil fell. Though, the Japanese market coming after a long weekend was trading higher.

Back home, Indian stocks markets turned volte-face on the first day of a new trading week, as what started on an optimistic note ended as a gloomy show. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory for second consecutive session despite getting off to a gap-up opening. Investors remained cautious over the monsoon session of Parliament which started today with key economic bills including the long pending GST Bill lined up to be passed. According to reports, the Opposition is likely to take aim at the government on several issues, including the recent Supreme Court verdict on Arunachal Pradesh, the recent developments regarding the Uniform Civil Code and India's unsuccessful bid to gain membership in the Nuclear Suppliers Group. However, investors got some comfort with the report that planting of crops has jumped 38 per cent in the past one week as monsoon rains have significantly increased since the end of June and have covered almost the entire country, raising hopes of much higher farm production than last year and moderate prices of pulses and rice. Water levels in reservoirs have also filled up to the average level, which is good for post-monsoon irrigation and hydropower generation. Some support also came with the industry chamber CII’s report indicating that Indian industry remained upbeat about the business environment in the first quarter ended June owing to salary hikes recommended by the Seventh Pay Commission, progress of monsoons and the government's proactive reforms agenda. The CII Business Confidence Index (BCI) has improved to 57.2 in April-June 2016, from 54.1 in the previous quarter.On the global front, Asian markets ended mostly in green on Monday. Back home, the benchmark got off to a rollicking opening as investors rejoiced the report that exports snapped18-month downward spiral and rose by 1.27% in June 2016. Thereafter, the indices in no time climbed to intraday highs and traded around the psychological 28,000 (Sensex) and 8,550 (Nifty) levels through the morning trades. But the optimism started showing signs of easing in late hours of trade with profit booking in few sectors and drifting European markets weighed down the local bourses by the end of session. Finally, the BSE Sensex ended lower by 89.84 points or 0.32% to 27746.66, while the CNX Nifty dropped 32.70 points or 0.38% to 8,508.70.