Markets to make a flat-to-mildly positive start

The Indian markets despite cautiousness and losing some strength in the latter half managed a positive close in last session, while the benchmarks snapped the two session losing streak, broader indices succumbed to pressure. Today, the start is likely to be mildly positive to flat. Though, there will be some concern with a suspected terrorist attack in UK where 19 people have been killed. Traders however will be getting some support with a new survey by the Confederation of Indian Industries (CII) and Indian Bank’s Association (IBA) showing that the outlook towards the financial condition of the country has taken a positive turn during the first quarter of the ongoing fiscal. The CII-IBA Financial Conditions Index stood at 56.9 for first quarter of 2017-18, as compared to 48 during the previous quarter. The banking stocks may see some recovery, as the Reserve Bank of India (RBI) has said that the oversight committee set up to decide loan restructuring cases under the so-called S4A scheme will be expanded by adding new members. RBI has also said that credit rating agencies will be given greater role in dealing with large amount of stressed assets in banks. There will be some buzz in the textile stocks, as the Textiles Minister Smriti Irani has said that the Textile Ministry will announce an incentive package for the knitwear sector in less than two months to help the industry cope with the challenging times. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets moved further high albeit modestly, trading activity remained somewhat subdued with a lack of major US economic data. The Asian markets have made a mixed start and some of the indices in the region are trading in red, as investors took a cautious approach amid the latest reports on the Trump administration and a suspected terrorist attack in the UK.

Back home, Monday's trading session was clearly of consolidation as the Indian benchmark indices appeared a bit fatigued and remained in tight range for most part of the day. Sentiments got some support after the government last week finalized rates for the upcoming goods and services tax (GST). The government on Friday unveiled four bands of rates under the GST for services in line with those applying to goods, a big departure from the current single rate of 15% applied on most services. Adding the optimism of investors, Revenue Secretary Hasmukh Adhia said Inflation will fall by 2% on implementation of the GST and create buoyancy in the economy. With the stage set for the biggest overhaul of India's tax system since Independence, the government will launch a massive awareness campaign to educate consumers about GST so that they are not fleeced by traders in the name of new tax. Some support also came after Maharashtra Assembly passed the GST Bill in today's session of its lower house. GST, which will come in force from July 1, will unify the country's economy into a common market and eliminate a string of central and state levies. The act is significant as the BMC gets a considerable share of its revenue through octroi, which will now be scrapped with the introduction of the GST regime.  Meanwhile, Foreign Direct Investment (FDI) inflows into the country touched a new high of $60.08 billion in 2016-17. FDI Inflows grew by 8% over the previous high of $55.6 billion posted in 2015-16. Increased FDI inflows in the country are largely attributed to intense and bold policy reforms the government undertook to bring pragmatism in the FDI regime. On the global front, Asian markets ended mostly higher on Monday as the Japanese yen weakened and US crude futures climbed back above $50 per barrel on expectations that major oil producing nations might extend their production cuts beyond an agreed-on June deadline when they meet on May 25. Finally, the BSE Sensex gained 106.05 points or 0.35% to 30570.97, while the CNX Nifty was up by 10.35 points or 0.11% to 9,438.25.