Markets to make a soft start tailing weak global cues

The Indian markets despite snapping the best F&O series in years ended flat in last session. Today, the start of the new series is likely to be in red tailing the weakness in other global markets. On the domestic front traders will be concerned with banking major ICICI reporting an eight percent fall in first quarter profit from a year earlier to Rs. 2,049 crore, though the bank said it was optimistic about containing its bad loans after the three months to June saw the smallest rise in soured assets for seven quarters. Traders will be getting some support with report from the prestigious Massachusetts Institute of Technology (MIT), which has said that monsoon has strengthened over north central India in the last 15 years, indicating a reversal in the general perception that the region has dried up in over a decade. There will be some buzz in the gems and jewellery stocks, as the government expects export growth of six per cent a year for the industry, which is going to be the new normal. Gems and jewellery net exports declined in FY’16 to $32 billion, as compared to $36.2 billion the previous year. There will be lots of important earnings to keep the markets in action.

The US markets made a mixed closing in last session, and while the Nasdaq and the S&P 500 pulled back into negative territory, the Dow reached a new record closing high. Traders took the opportunity to cash in on some of the recent strength despite a report showing a substantial increase in durable goods orders in the month of June. The Asian markets have made mostly a soft start on some weak earnings; attention remained on corporate results ahead of a report on U.S. second-quarter growth.

Back home, Markets went home empty handed on July month F&O expiry despite trading jubilantly for most part of the day. It was the final hour of trade which played spoil sports for Indian equity benchmarks and rally got fizzled out with key indices ended unchanged, as traders opted to book profits at higher levels. Markets kick started the day on optimistic note, hitting lifetime highs of 32,672.66 (Sensex) and 10,114.85 (Nifty) levels, as sentiments remained up-beat with news that retirement fund body the Employees’ Provident Fund Organisation is planning to pump in Rs 22,500 crore in exchange traded funds in 2017-18 following approval from the central board of trustees to increase the equity investment from 10 per cent to 15 per cent. Traders also took some comfort with report that Bharatiya Janata Party (BJP) strengthened its foothold in Bihar after Nitish Kumar ended his party, JDU’s mahagathbandhan or Grand Alliance with Lalu Yadav’s RJD and the Congress last evening and joined hands with his former partner BJP. Investors also took note of global financial services major report that the Reserve Bank of India is expected to go for a 25 basis points (bps) repo rate cut in its policy review meet on August 2 as inflation is likely to have reached a new normal of 4 percent. The report highlighted that inflation in India has fallen dramatically, and though the excessively low level it witnessed this fiscal is not sustainable, the rebound may not be too sharp either. However, markets failed to hold their early gains and started moving southward to end flat on account of late selling in bluechips like Reliance Industries, ITC, Infosys, TCS and Bharti Airtel. A string of mixed-to-weak corporate earnings also soured sentiment. Finally, the BSE Sensex rose marginally by 0.84 points to 32,383.30, while the CNX Nifty was down marginally by 0.10 points to 10,020.55.