Markets to get a soft start on weak global cues

The Indian markets posted modest gains in last session, hitting their fresh closing highs, as weak US inflation and retail sales data dimmed prospects of more Fed rate hikes this year. Today, the start is likely to be soft tailing the weak global cues, investors would keep an eye on the monsoon session of Parliament, which is expected to be stormy. Markets however, may get some support with a private survey stating that Indian CEOs are confident about the growth prospects of the country over the next three years, compared to that of global economy. Further, they believe technology will be one of the top factors impacting growth of their organisations in the next three years. Meanwhile, the Supreme Court granted one week's time to the Reserve Bank of India (RBI) to respond to a report of a committee appointed to deal with bad loans with banks that have crossed Rs 8 lakh crore. The cigarette stocks will remain under pressure, as the GST Council raised the cess on cigarettes to take away an estimated Rs 5,000 crore annual ‘windfall’ manufacturers could have reaped from lower GST rates. The telecom stocks too will be in focus, as the Telecom Minister Manoj Sinha has said that the Communications Ministry will 'analyse' the impact of Goods and Services Tax on telecom subscribers, and approach the Finance Ministry in case consumers or players face “genuine problems”.

The US markets ended mostly in red in the last session, though Nasdaq ended with positive bias, the Dow and S&P declined marginally from their record highs reached on Friday, as investors looked toward key quarterly results that will be released this week to set the tone. The Asian markets have started mostly in red, halting a six-day surgeon concern that the U.S. health-care reform bill is effectively dead in its current form, casting a cloud on President Donald Trump’s broader economic revitalization agenda.

Back home, resuming their record setting spree, Indian equity benchmarks ended the session with decent gains, with Sensex closing at new peak and Nifty ending above 9,900 mark for the first time. Markets after making an optimistic start traded in tight band throughout the session. Sentiments remained up-beat with latest edition of the Organisation for Economic Co-operation and Development’s (OECD) 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. Traders also took some support with report that India’s trade deficit narrowed in June after swelling to a 30-month high in May even as exports grew slowly in the month. Exports grew 4.39%, a four-month low in the 10-months of continuous growth, to $23.5 billion. Trade deficit was $8.1 billion in the year ago period and $13.84 billion in May. Some support also came with report that 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. Adding to the optimism, foreign investors have poured nearly Rs 11,000 crore in the capital markets in the first two weeks of July, supported by the trouble-free rollout of GST and stimulating Indian economy. The latest inflow comes following a net infusion of over Rs 1.62 lakh crore in the previous five months (February-June) on several factors. Finally, the BSE Sensex gained 54.03 points or 0.17% to 32,074.78, while the CNX Nifty was up by 29.60 points or 0.30% to 9,915.95.