Markets to extend the gains on supportive global cues

The Indian markets recovering from a volatile trade posted gains of over a quarter percent in the last session. Today, the start of the day is likely to be in green and the bourses will be extending the gains. Though, traders will be eyeing the key macro data of IIP and CPI inflation slated to be announced after the market hours. Meanwhile, Reserve Bank of India has included factoring transactions under priority sector lending with an aim to increase cash flow to small and medium enterprises. RBI said the factoring transactions taking place through TReDS shall also be eligible for classification under priority sector upon operationalisation of the platform. There will be buzz in the power stocks, as the government has said that there is no shortage of coal in the country and coal stock for 23 days is available with thermal power stations. Coal Minister Piyush Goyal has said that multi-dimensional efforts are underway by Coal India to substantially enhance coal production to meet the coal requirement.

There will be lots of scrip specific actions to keep the markets buzzing as many big names will be coming up with their June quarter earnings. Sun Pharma, Cipla, Hindalco, Allahabad Bank, Glenmark Pharma, NHPC, OBC, Aban Offshore, Bajaj Electricals, Central Bank, Dena Bank, Divi's Labs and Jain Irrigation are among many to announce their numbers.

The US markets made a positive close in last session, supported by some upbeat earnings and a substantial increase by the price of crude oil. Also, initial jobless claims edged slightly lower in the week ended August 6th. The Asian markets have made mostly a positive start, tailing the good US market cues and on gain in crude prices, though Chinese economic data fell short of estimates.

Back home, after trading on a feeble note for most part of the session, domestic benchmarks managed to negotiate a close in the green terrain, breaking the two session downtrend, as continued heavy buying by foreign investors helped lift blue chips such as IDEA, BPCL, ITC even though overall sentiment remained cautious. Although Asian markets ended on mixed note and European stocks made an optimistic start, global sentiments remained somewhat subdued as oil prices came under pressure after the International Energy Agency offered a downbeat outlook for oil prices. However, investors got some comfort with monsoon session of parliament proceeding rather smoothly, fallowing GST Amendment. Lok Sabha on Tuesday passed the Taxation Laws (Amendment) Bill, 2016, that, among other things, will pave the way for the textile sector getting tax sops. Further, sentiments got some support with the report that the government is working out a plan to optimally utilize land banks of state run companies as part of its bigger ambition to monetize the assets of public sector enterprises. The government will look at all central public sector companies (CPSEs), including profit making firms, to assess if their existing resources can be utilized for spurring the economic growth. Meanwhile, mild buying was observed in selected textile counters, as the Lok Sabha passed the Taxation Laws (Amendment) Bill, 2016, relaxing the rules for the textile sector to avail itself of the income tax benefit on additional employment created. On the global front, Asian markets ended mixed on Thursday, while the European equities hovered near a seven-week high. Back home, the benchmark got off to a positive opening, in tandem with the cautiously optimistic sentiments prevailing in Asian markets. The frontline indices soon gathered momentum and touched intraday highs in noon trade, but could not succeed in holding their gains for long as selling pressure at higher levels brought the indices to intraday lows in late morning session. Thereafter, the bourses recovered from the lows of the day but could not succeed in recovering all of their early gains by the end of trading session. Finally, the BSE Sensex gained 84.72 points or 0.31% to 27859.60, while the CNX Nifty rose by 16.85 points or 0.20% to 8,592.15.