Markets to make a weak start tailing feeble global cues

The Indian markets coming off the initial choppiness managed to extend the gains and the benchmarks reached new record highs in the last session. Today, the start is likely to be somber on weak global cues and all eyes will be on the two-day GST Council meet beginning in Srinagar, which will see participation from 29 states and union territories, along with Jaitley, and senior officials from the revenue department. In the meeting Finance Ministry Arun Jaitley is likely to finalise the rates that various goods and services will attract from July 1. Meanwhile, the Union Cabinet has approved a transparent mechanism for coal allocation and signalled a renewed focus on nuclear power generation. There will be some support to the markets with Commerce and Industry Minister Nirmala Sitharaman’s statement that India's exports have been increasing despite global headwinds and efforts are being made to neutralise any impact on them due to implementation of GST. There will be some buzz in media and construction companies on report that the government is moving ahead with further opening of print media, construction and retail sectors to foreign investments and the commerce and industry ministry may soon approach the Union Cabinet to get the final approval on the proposals. There will be lots of important earnings announcements to keep the markets in action.

The US markets slumped in the last session and the tech-heavy Nasdaq which has been on a record breaking spree pulled back well off its record closing high, amid ongoing political turmoil in Washington further offsetting optimism about President Donald Trump's ability to implement tax reform and deregulation. The Asian markets have made a weak start tailing the US sell-off. The Japanese market was down by over a percent as the yen strengthened against the dollar.

Back home, domestic frontline indices went through a choppy session of trade to finally negotiate a close in the green territory, as a strong rupee and healthy buying in metal and automobile stocks buoyed investors' sentiments. Further, the continued buying from FII and announcement of good quarterly results by some blue-chip companies kept a positive vibe in the market. Adding the optimism of investors, senior UN economic official has said demonetisation policy is not expected to have a long-term impact on domestic demand in India, which is projected to clock a 7.9% growth in fiscal 2018. Also, the Union Finance Minister Arun Jaitley said that government’s move to demonetise Rs 500 and Rs 1,000 notes has helped the authorities bring 9.1 million people under the tax net as money has lost its anonymity. Markets exhibited sideways pattern as traders were adopting a cautious approach ahead of a crucial GST (Goods and Services Tax) panel meet in Srinagar starting tomorrow. Besides, negative trend was seen in global markets, amid ongoing political uncertainty in the US, capping the gains. However, investors' sentiments got some support with Indian Meteorological department’s (IMD) statement that the southwest monsoon will hit Kerala on May 30, two days ahead of schedule. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent.  Meanwhile, power stocks gained after the CCEA approved a new coal linkage policy to ensure adequate supply of the fuel to power plants through reverse auction. Buying intensified in metal stocks after India Ratings and Research said that the National Steel Policy 2017 announced by the Ministry of Steel will give a boost to the struggling Indian steel industry and it is betting on higher spending on infrastructure and construction sector through government initiatives to push steel demand and increase utilization. The policy focuses on improvement in the efficiency parameters so as to reduce the cost of production and develop advanced steel products to reduce the dependence on imports. Finally, the BSE Sensex gained 76.17 points or 0.25% to 30658.77, while the CNX Nifty was up by 13.50 points or 0.14% to 9,525.75.