Markets to make a muted start lacking any supportive factor

The Indian markets after a choppy trade managed a modestly positive close in the last session. Today, the start is likely to be muted lacking any major supportive factor and amid sluggish global cues. There will be some concern in the market with  Economist and Nobel laureate Paul Krugman's warning that India has a very narrow window to pursue its development agenda as the era of hyperglobalisation is over and global trade will at best grow slower or at worst shrink. Krugman also came down heavily on Indian policymakers for pursuing a tight monetary and fiscal policy. Markets however may get some support in latter trade with an ASSOCHAM study stating that Industry is expected to contribute $ 280 billion to India's GDP in eight to nine years due to positive fallout of the Goods and Services Tax (GST) as structural changes in the ease of doing business will propel growth. Also, Finance Minister Arun Jaitley has said that despite the anticipation of initial disruptions on account of the Goods and Services Tax (GST), the rollout of the new indirect tax regime from July 1 was smooth and without any significant glitches. There will be some buzz in the power sector stocks, as the Power Ministry has launched a portal for optimum utilisation of domestic coal by Independent Power Producers. Producers can reduce power costs by 10 paisa per unit through rationalising of coal supply made possible through the e-bid portal.

The US markets made another mixed closing in the last session after a lackluster performance, as many traders remained away from their desks after the market holiday. Also, there was some cautiousness with the Federal Reserve plans to reduce their bloated balance sheet but failing to provide a specific timeline to begin the process. The Asian markets too have made a mixed start and some of the indices are down by about a quarter percent, with investors digesting details from the Federal Reserve’s most recent meeting, ahead of a G-20 summit and a key U.S. jobs report. Japanese market has led the losers, as the yen strengthened.

Back home, A session after displaying a distressing performance, Indian benchmark indices have managed to eke out moderate gains on Wednesday, tracking positive trade in global markets after focus shifted from geopolitical tensions around North Korea to minutes from the US Federal Reserve’s last policy meeting. Sentiments got a boost after India’s services PMI rose to an eight month high in June at 53.1 as against 52.2 in May of 2017. This was also the fifth consecutive month of expansion as business environment for services sector in the country continued to improve. Some support also came with the report that global & domestic private equity funds have pumped in around $11.3 billion in the country for the first half of the current year ending June 30, making it the record highest foreign direct investment into the country. Adding optimism among investors, an Assocham-APAS study revealed that with the rollout of the Goods and Services Tax (GST), the industry alone is expected to contribute $280 billion to India's Gross Domestic Product (GDP) in the next eight to nine years. According to the chamber, the GST will enable positive structural changes in the ease of doing business, which in turn would propel the growth. Finally, the BSE Sensex gained 35.77 points or 0.11% to 31245.56, while the CNX Nifty was up by 24.30 points or 0.25% to 9,637.60.