Markets to make a cautious start on sluggish global cues

The Indian markets surged in last session, posting gains of over a percent on hopes of GST getting passed in the monsoon session of the parliament. Today, the start is likely to remain cautious as the global markets are not in a good shape and traders will be eyeing further development with Finance Minister Arun Jaitley meeting his counterparts in states to discuss proposed amendments to the GST Bill today. Meanwhile, Minister of State for Finance Arjun Ram Meghwal has said that Government is working overtime to build a consensus on the long-pending Goods and Services Tax bill with the hope of getting it passed during the ongoing Parliament session. Also, Petroleum Minister Dharmendra Pradhan has said that government is exploring ways to bring the petroleum products under the ambit of the proposed GST with the consent of states. The oil and gas sector will also be in action with report that the government is likely to completely exempt upstream oil and gas companies such as Oil and Natural Gas Corporation, Oil India and Gail India from contributing towards fuel subsidies. The telecom stocks too will be in action with the Telecom Commission recommending a weighted average formula for spectrum held by mobile operators with a minimum levy of 3%. The floor decided by the inter-ministerial panel will also be the spectrum fee that will be paid for new airwaves that are due to be auctioned later this year. Banking stock will be reacting to the Reserve Bank of India (RBI) imposing a penalty of Rs.27 crore on 13 banks for violating several norms.

There will be lots of important earnings announcements to keep the markets buzzing. ACC, Ambuja Cements, Ajanta Pharma, Bajaj Finserv, Bajaj Finance, IDFC, Maruti Suzuki, SBT and Zee Entertainment are among many to announce their numbers today.

The US markets ended modestly lower in last session, partly due to profit taking, with traders cashing in on the strength seen over the past few weeks. However, the trading activity remained light amid a lack of major U.S. economic data. The Asian markets have made a mixed start, with some of the indices trading lower led by the Japanese market, which was down by over one and half a percent as the yen strengthened and crude oil traded near a three-month low.

Back home, Indian stock markets showcased the best performance not only among the Asian peers but also against the markets across the globe, as the frontline indices registered strong gains of over a percent on Monday.  Sentiments got a boost with the reports that Finance Minister Arun Jaitley will meet his counterparts in states to discuss proposed amendments to the GST Bill on Tuesday, with the likely listing of GST Bill in Rajya Sabha this week. Besides, a firming trend overseas as investors pinned their hopes on fresh Bank of Japan stimulus too accelerated buying activity in domestic equities.  Some support also came with the report that Crop planting jumped 23.8 per cent in the past one week helped by heavy rains during the period, with the current overall planting standing at 3.28 per cent higher than last year at 692.98 lakh hectare. The increase was largely seen in acreage of rice, pulses and coarse cereals. Further, Water levels in reservoirs have also risen significantly in the past month, providing more water for irrigation which is good news for farmers. Meanwhile, IT exporters like TCS and Infosys gained amid robust US economic data and a weaker rupee, while state-owned oil companies like Indian Oil Corporation and BPCL touched their fresh lifetime highs on renewed buying interest amid reports of Cabinet Secretariat’s proposal to merge 13 oil PSUs into one behemoth. On the global front, most of the Asian markets ended the session on firm note, while the European stocks too rose in early trade. Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade, with investors turning jittery after the International Monetary Fund (IMF) warned that headwinds from weaknesses in Indian corporate and bank balance sheets, slowing pace of reforms and sluggish exports may weigh on the country's economic growth. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. Finally, the BSE Sensex surged by 292.10 points or 1.05% to 28095.34, while the CNX Nifty rose by 94.45 points or 1.11% to 8,635.65.