Markets to get a cautious start; RIL in focus

The Indian markets could not manage to extend their gains in last session. Today, the start is likely to be a bit cautious on muted global cues, however, upbeat earnings from market heavyweight Reliance Industries is likely to support the markets. The company has reported a consolidated quarterly net profit increase of 28%, helped by higher-than-expected refining and petrochemicals margins and a one-time gain. Net profit rose to Rs 9,079 crore in the quarter ended June from Rs 7,077 crore a year earlier. Revenue rose to Rs 92,661 crore, an increase of 25.5% from Rs 73,829 crore a year ago. Also, traders will be getting some advantage with an ADB supplement report stating that India is expected to achieve the projected growth rate of 7.4 percent in 2017 and further up 7.6 percent next year on strong consumption demand, with South Asia leading the growth chart in Asia and the Pacific. Realty stocks may see some upmove on reports that foreign investment in Indian real estate sector jumped more than two-fold at $ 7.6 billion during 2014-16 period compared with the previous three years. US accounted for more than 40 per cent of the foreign investments, followed by Canada (18 per cent) and Singapore (17 per cent). However, the earnings will be keeping the overall markets buzzing for the day.

The US markets ended mostly lower in the last session, while the Asian markets have made a mixed start and the Japanese market was in red as yen strengthened, as investors assessed an investigation into the U.S. president that may stall his economic agenda.

Back home, Indian equity benchmarks undoing all the good work done in early part of the session and ended the lackluster day of trade slightly in red, as traders remained on sidelines ahead of Reliance Industries (RIL) Q1FY18 numbers. Though, markets made an optimistic start 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 percent since its roll-out on July 1. Traders also took some encouragement 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.  Market took U-turn in second half of trade where traders opted to book profit ahead of RIL’s Q1 numbers slated to be announced after market hours. According to a private poll, the company is expected to post consolidated net sales of Rs 76,326 crore and net profit of Rs 7,764.5 crore for the three months ended 30 June. Though, downside remained capped, as traders get some solace with the Asian Development Bank’s report stating that the South Asia will remain the fastest growing of all sub-regions in Asia and the Pacific, while Indian economy is expected to achieve previous growth projections 7.4 percent in 2017 and 7.6 percent in 2018 on the back of strong consumption demand. Finally, the BSE Sensex lost 50.95 points or 0.16% to 31,904.40, while the CNX Nifty was down by 26.30 points or 0.27% to 9,873.30.