Markets to get a flat-to-positive start of the new week

The Indian markets showed good recovery attempt in the final hours of the last session but ended marginally in red. Today, the start of the new week is likely to be in green tailing the positive global cues, though traders will be eyeing the start of the official earnings season this week to gauge the performance of India Inc in the first quarter. Traders will also be getting some support with reports that foreign investors have pumped in nearly $ 23 billion into the Indian capital markets in January-June 2017 on several factors, including expectations of accelerated pace of reforms. Meanwhile, Prime Minister Narendra Modi, noting that the GST (Goods and Services Tax), which was implemented last week, was the biggest tax reform in the last 70 years has said it would help businesses and create a unified market of 1.3 billion people. Modi also underlined support for free and open trade regime of World Trade Organization (WTO). There will be some buzz in the aviation sector, as the Finance Ministry has exempted aircraft imported on lease from the 5 per cent Goods and Service Tax (GST) levy. Under the recently introduced GST regime, aircraft imported on lease basis attracted integrated GST (iGST) of 5 per cent.

The US markets came out of the sluggish mood in the last session and posted good gains on getting an upbeat job data, with the Labor Department showing much stronger than expected job growth in the month of June. The Asian markets have made mostly a positive start led by the Japanese market which is up by over half a percent in early deals as the yen fell. The Chinese shares were lower even though producer prices showed robust demand in Asia’s largest economy.

Back home, Friday turned out to be a choppy day of trade for Indian equity benchmarks, where Sensex and Nifty went home with marginal cut, as market participants opted to remain on sidelines ahead of the quarterly earnings starting next week. Markets started the session on pessimistic note and extended southward journey, breaching their crucial 31,300 (Sensex) and 9,650 (Nifty) levels, as traders remained cautious with the report that India slipped by one spot to become the fourth-largest foreign investor into the UK. India set up 127 new projects in Britain last year and safeguarded 7,645 existing jobs as a result and created 3,999 new jobs in 2016-17. Traders also stayed on sidelines ahead of outcome of the G20 Summit began on July 7, as world leaders assembled to discuss fight against terrorism and ways to improve open trade. However, markets witnessed recovery in afternoon deals and get back their crucial bastions, as traders took some solace with report that net direct tax collection grew by 14.8 percent to Rs 1.42 lakh crore at the end of first quarter on account of surge in advance tax payments. According to the Ministry of Finance, the net direct tax collection represents 14.5% of the total Budget estimates of direct taxes of Rs 9.8 lakh crore for FY18. Traders also took some relief with Finance Minister Arun Jaitley’s statement that the rollout of the Goods and Services Tax has been smooth, without causing much disruption. He said the economy has not been disrupted and we don’t expect any disruption ahead, refuting critics who had thought that the GST rollout would impact trade and industry. Finally, the BSE Sensex shed 8.71 points or 0.03% to 31,360.63, while the CNX Nifty was down by 8.75 points or 0.09% to 9,665.80.