Markets to make a flat-to-positive start

The Indian markets made a good bounce back in last session, recovering most of their losses of previous session, supported by firm global cues and some upbeat earnings announcements. Today, the start is likely to remain in green on positive global cues. Markets will be getting some support with Finance Minister Arun Jaitley’s statement, describing the Goods and Services Tax (GST) as a “win- win” deal for all as it will expand the tax net, end “inspector raj” and bring down prices of goods. Jaitley added that prices of goods have come down between four to eight per cent since its roll-out on July 1. Meanwhile, the government has said that tax rates under the Goods and Services Tax (GST) will not be revised unless there is an anomaly, but promised to go slow on enforcement actions in the first six months on genuine mistakes. Markets will also be getting some support with a private report that India will reclaim its position as the fastest growing major global economy this year, partly propelled by benefits from a new tax system and bolstered by an expected central bank interest rate cut. The oil and gas stocks are likely to be in focus, after the government cleared the sale of Hindustan Petroleum to flagship explorer ONGC with the aim of creating an integrated oil company. There will be lots of important earnings announcements to keep the markets in action today.

The US markets surged in last session with major averages climbing to new record highs in reaction to a report from the Commerce Department showing a bigger than expected rebound in housing starts in the month of June. The Asian markets have made an all green start after fresh all-time highs for US equities spurred gains ahead of meetings from central banks in Japan and Europe. The BOJ is expected to go on bucking the recent hawkish tilt from its peers, leaving its unprecedented stimulus measures in place.

Back home, Indian equity benchmarks once again back on track with frontline gauges, erasing most of their previous session losses, settled almost at 32,000 (Sensex) and 9,900 (Nifty) levels. Markets traded with full traction throughout the session, as sentiments remained up-beat with NITI Aayog Vice Chairman Arvind Panagariya’s statement that India’s GDP could rise to about $8 trillion over the next 15 years if the country registers an economic growth of 8 percent annually and come very close to eliminating abject poverty entirely. Traders also took some encouragement with rating agency Fitch’s latest report stating that new indirect tax regime Goods and Services Tax (GST) is likely to be beneficial for auto, cement and organised retail sectors, but will have a negative impact on oil and gas, and SME sectors. Rally got extended in last leg of trade with private report stating that India will reclaim its position as the fastest growing major global economy this year, partly propelled by benefits from a new tax system and bolstered by an expected central bank interest rate cut. Finance Minister Arun Jaitley’s statements that the GST is a win- win deal for all as it will expand the tax net, end inspector raj and bring down prices of goods too supported the sentiments. Pharma stocks remained on buyers’ radar on report that the government is looking at introducing a new National Pharmaceuticals Policy and is already in the process of working out details. The oil & gas stocks too remained in action, as the government is likely to consider the sale of government's 51.11 per cent stake in Hindustan Petroleum Corp (HPCL) to Oil and Natural Gas Corporation (ONGC) for over Rs 28,000 crore. Finally, the BSE Sensex surged 244.36 points or 0.77% to 31,955.35, while the CNX Nifty was up by 72.45 points or 0.74% to 9,899.60.