Markets to make a mildly positive to cautious start

The Indian markets though recovered from the lows of the day but ended marginally in red in the last session. Today, the start of the new week is likely to be mildly in green but cautiousness may prevail ahead of the start of the monsoon session of Parliament. A total of 21 Bills pending in Lok Sabha and 42 Bills pending in Rajya Sabha will be in focus. Markets may get some support with latest edition of the OECD`s economic outlook report on India stating that economic growth is projected to remain strong and India will remain the fastest growing G20 economy. It added that private consumption has been buoyant, boosted by the increase in public wages and pensions and by higher agricultural and rural incomes. Meanwhile, Prime Minister Narendra Modi held a meeting with senior government functionaries to review the country`s current foreign direct investment (FDI) policy, which discussed measures to further liberalise the policy, so as to attract more FDI in various sectors. Markets will also be getting some support with data that India's trade deficit narrowed more-than-expected to $12.96 billion in June as gold imports nearly halved from a month earlier. There will be lots of important earnings announcements to keep the markets buzzing for the day.

The US markets moved higher in the last session with Dow and S&P climbing to new record highs, following the release of several key economic reports, with the data suggesting that the Federal Reserve will not be in any hurry to raise interest rates. The Asian markets have made mostly a positive start though the Chinese market was down amid concern that policies to reduce leverage in Asia’s biggest economy will curb earnings.

Back home, record hitting streak comes to an end on Friday, with frontline gauges settling tad below their neutral lines, as traders opted to book some of their profits after four days of continues rally. Initially, Sensex opened at a new high of over 32,100 mark, while Nifty too hit a new peak of 9,900 mark for the first time ever on strong buzz that a policy rate cut may be on the anvil after inflation touched a ‘record low’. However, markets failed to hold on to their gains and entered into red terrain, breaching their respective crucial levels, as traders remained concerned with disappointing earnings by the Tata Consultancy Services, India’s largest software services exporter whose quarterly profit fell 10 percent sequentially, while revenues declined 0.2 percent. Moreover, another IT bellwether firm Infosys reported a 3.3 per cent sequential drop in net profit at Rs 3,483 crore for June quarter. Investors also remained on sidelines ahead of high-profile meeting chaired by Prime Minister Narendra Modi to review the country’s foreign direct investment policy, where further easing of restrictions may also be discussed. Losses remained capped with report that India is ranked 116 out of 157 nations on a global index that assesses the performance of countries towards achieving the ambitious sustainable development goals (SDGs). India with a score of 58.1, is behind countries such as Nepal, Iran, Sri Lanka, Bhutan and China. The SDG Index and Dashboards Report shows world leaders need to strengthen their efforts to realize the 17 global goals. Some solace also came with report that the wholesale price index based inflation fell to 0.9 percent in June from 2.17 percent in May. The fall in WPI as well as CPI inflation raised hopes for rate cut by RBI in August monetary policy. Finally, the BSE Sensex declined 16.63 points or 0.05% to 32,020.75, while the CNX Nifty was down by 5.35 points or 0.05% to 9,886.35.