Markets to get a strong start on supportive regional cues

The Indian markets after much of dilly-dallying made a flat closing in the last session. Decline in IT and healthcare stocks offsetted a rebound in banking stocks. Today, the start of the new week is likely to be in green tailing the positive regional cues. Traders will also be getting some support with the GST Council fixing nagging issues and the government putting at rest speculation about a possible delay in GST rollout. Also, the Finance Minister Arun Jaitley said the government will let companies to file late returns for the first two months to let them adapt to a new system. Meanwhile, the industry body Confederation of Indian Industry (CII) said India Inc is ready for the implementation of the Goods and Services Tax (GST) from July 1, as the new indirect tax regime will contribute significantly towards economic growth, job creation and exports expansion. Though, another industry body Assocham has demanded postponing GST implementation, saying that taxpayers will find it difficult to comply with the provisions of the new indirect tax regime as the IT network is not yet ready. The banking sector stocks will be in action, as the bankers are meeting from today to finalise their next course of action on six of the 12 bad loan accounts for immediate referral to NCLT after the RBI named the largest defaulters to face bankruptcy proceedings. There will be some buzz in the steel sector, as the Centre has said it will ensure that steel products are not imported in the guise of utensils or finished products. India has been successful in reducing import of steel by 37 percent during 2016-17.

The US markets ended modestly in red in the last session on another round of downbeat economic data. The Asian markets have made a green start and many of the indices in the region are up by over half a percent. There was some relief with a member of the US president’s legal team stating that President Donald Trump isn’t under investigation by special counsel Robert Mueller.

Back home, Indian equity markets prolonged the weakness for second straight day finished the session on a dull note, amid lack of global as well as domestic cues. Sentiments remained subdued with the report that the current account deficit soared to $3.4 billion, or 0.6 per cent of gross domestic product (GDP), in the fourth quarter of financial year 2017, from $0.3 billion a year ago. Balance of payments for the full financial year stood at $21.6 billion, while for Q4 the same stood at $7.31 billion. Some concerns also came with report that foreign portfolio investors (FPIs) sold shares worth a net Rs 645.35 crore on June 15, 2017. However, the downside for the markets was capped with the report that India’s exports grew 8.32 per cent to $24.01 billion in May, mainly on account of robust performance by sectors like petroleum, chemicals, engineering goods as well as gems and jewellery. Some support also came with the report that government is looking to clear FDI proposals in the 11 sectors, such as defence, insurance and telecom, where approval is still required within eight to 10 weeks of receipt of application to boost the investment climate after the abolition of the Foreign Investment Promotion Board (FIPB). Meanwhile, sharp correction was witnessed in Healthcare and IT counters, while index heavyweights such as ITC, Tata Motors continued to support the market. Technology stocks declined on worries over outlook at a time when US President Donald Trump is contemplating tougher visa actions in a key market for software services exporters, while Pharma stocks slipped amid worries about their earnings outlook, because of pricing pressures in the United States. Finally, the BSE Sensex declined 19.33 points or 0.06% to 31056.40, while the CNX Nifty was up by 10 points or 0.1% to 9,588.05.