Markets to make a flat but positive start on cautious global cues

The Indian markets despite a choppy day of trade ended up by around a quarter percent in the last session. Today, the start is likely to be flat but in green. Markets will be getting some support with IMF’s statement that India’s growth is expected to rebound to 7.2 per cent in the 2017-18 fiscal and 7.7 per cent in 2018-19 after disruptions caused by demonetisation, the IMF said this while recommending the removal of long-standing structural bottlenecks to enhance market efficiency. Meanwhile, Revenue Secretary Hasmukh Adhia is hopeful of a smooth transition to the GST regime and says it will help domestic firms to become more competitive apart from streamlining the taxation for all business activities. There will be buzz in the banking sector stocks, with largest PSU lender State Bank of India reducing its affordable home loan rates by up to 25 basis points for new borrowers. Other banks and housing finance companies are expected to follow suit in the coming days. Meanwhile, Finance Minister Arun Jaitley has said that the government is open to providing more funds for banks’ recapitalization and willing to bring down its equity in the banks to 52 percent once their health improves. There will be lots of earnings reactions to keep the markets buzzing.

The US markets consolidated in the last session and made a flat closing, lacking any cues. Traders remained on sidelines eyeing some key economic data to be released later in the week. The Asian markets have made mostly a lower start lacking any catalysts to spur further gains and some of them have slipped from a two year high.

Back home, Indian stock markets witnessed a fairly stable day of trade on Monday, as investors' sentiments around the globe turned optimistic after Emmanuel Macron was elected French president with a business-friendly vision of European integration, defeating Marine Le Pen, a far-right nationalist who threatened to take France out of the European Union. On the domestic front, sentiments got a boost after Finance Minister Arun Jaitley ruled out any surprises in the tax rates in the Goods & Services Tax (GST) that is proposed to be rolled out on July 1 and also assured that there will be no cascading in goods and commodities, which can even see tax rates coming down a little. The finance minister chaired GST council is scheduled to finalise and approve the rates of different commodities and services on May 18-19. Adding the optimism among investors, Economic Affairs Secretary Shaktikanta Das said the soon to be rolled out GST regime will help the country to grow close to 8 percent in next fiscal 2018-19. He also stated that the GST will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Some support also came with the report that India is planning to revamp its foreign trade policy and relook at incentives to give a leg up to the export sector, which is hurt by lower global demand as well as an appreciating rupee. The government proposes to come out with a mid-term review of the Foreign Trade Policy (FTP) 2015-20 in September. However, gains remained capped with the report that India's FDI inflow momentum may slow down this year and exports too may not revive with 'full gusto' as domestic bottlenecks remain. Finally, the BSE Sensex gained 67.35 points or 0.23% to 29926.15, while the CNX Nifty was up by 28.75 points or 0.31% to 9,314.05.