Markets to get a modestly positive start on sanguine global cues

The Indian markets losing their initial momentum and turning choppy during the day, ended marginally in red in the last session. Today, the start of the penultimate session of the F&O series expiry is likely to be modestly in green on sanguine global cues. Though, traders will be eyeing the US Federal Reserve’s policy decision later in the day for more clues on its tightening plans. On the domestic front, the government has approved an addition of 7.47 lakh new registration applications under the Goods and Services Tax (GST) regime. The banking and telecom stocks will be in focus, as the Finance Minister Arun Jaitley has said banks have an exposure of Rs 97,681 crore in the telecom sector, which is grappling with financial stress. Total outstanding (funded) advances by public sector banks to the ‘communications’ sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore. Power sector too will keep buzzing, as the Ministry of Power has said that outstanding liabilities of power distribution companies to central public sector undertaking power producers have halved under the Ujwal Discom Assurance Yojana.

The US markets came out of their sluggishness in last session and with the upward move on the day, the Nasdaq and the S&P 500 reached new record closing highs. The gains were positive reactions to latest earnings and an unexpected improvement in consumer confidence in the month of July. The Asian markets have made mostly a positive start taking cues from the US markets led by the gains in energy stocks after Saudi Arabia’s promise to further cut crude exports spurred the biggest rally in oil since November.

Back home, Indian equity benchmarks ended the volatile day of trade with modest cut on Tuesday, as traders opted to remain on sidelines ahead of Fed’s two-day meeting starting later in the day to discuss its monetary stance. It turned out to be a historic day of trade for Nifty where it breached the 10,000 mark for the first time in opening trade but soon slipped below the landmark, making the affair a touch-and-go one, as traders opted to book profit at higher level. Sensex too hit another record high of 32,374.30 in initial trade before closing lower by 18 points. However, losses remained capped with commerce and industry minister Nirmala Sitharaman’s statement that Foreign Direct Investment (FDI) inflows into the country increased 23 percent in the first two months of the current fiscal from a year ago. The minister said the government has put in place an investor-friendly policy for FDI and except for a small negative list most sectors are open for 100 percent FDI. Some solace also came with report that India ranked number two on Grant Thornton’s Business Optimism Index in the second quarter of 2017. The Grant Thornton International Business Report (IBR) said that the confidence in Indian businesses is backed by a buoyant economy and continued reforms. According to the IBR survey, India’s ranking has gone up from fourth to the second position in Q2. 94 percent of the surveyed businesses are confident about the growth of the Indian economy. Traders also took some comfort with report that government think tank Niti Aayog has made a strong case for boosting investments and savings, with an aim to push India’s economic growth at a rapid pace. The Aayog stressed on sustaining macro-economic stability in its appraisal of the Twelfth Five Year Plan (2012-17). The document noted that lower savings and investment rates are still a major cause of worry. Finally, the BSE Sensex slipped 17.60 points or 0.05% to 32,228.27, while the CNX Nifty was down by 1.85 points or 0.02% to 9,964.55.