The Indian markets despite some late hour recovery ended marginally lower in the last session. Today, the start of the crucial data heavy week is likely to be flat-to-green with the Reserve Bank of India (RBI) reviewing its monetary policy on August 2, with most economists expecting a 25 bps rate cut on the back of falling retail inflation. Meanwhile, ahead of the next monetary policy review, Reserve Bank Governor Urjit Patel on Friday called on Finance Minister Arun Jaitley and is believed to have discussed various macro-economic issues. Traders will be getting some support with Finance Minister Arun Jaitley’s statement, who underlining the government’s push on reforms has said that in the last three years, the prime minister has been forcing one or two important changes. India has to become a country where it is easy to do business and the businesses are done in the most ethical way. The government estimates that total registrations, old and new, under the goods and services tax (GST) will add up to between 90 lakh and one crore by the end of the financial year, substantially increasing the tax base and ushering in greater compliance. There will be buzz in oil stocks, as the union minister Dharmendra Pradhan has said that centre is planning to set up petrochemical clusters in eastern, western and southern India, to spur growth of the sector amid increasing demand. There will be lots of important earnings announcements that will keep the markets in action.
The US markets made a mixed closing in a negative reaction to the latest batch of earnings news. Concerns about the latest developments in Washington also weighed on the markets after Republicans failed in their latest attempt to repeal Obamacare. The Asian markets have made mostly a positive start with gain in raw-material producers after a surge in commodity prices bolstered optimism the global economy can gather momentum.
Back home, recovery in last leg of trade helped Indian equity benchmarks to pare most of their early losses, but was not enough to pull indices into green terrain on Friday. Markets went home with modest cut, as traders opted to book profit ahead of Reserve Bank of India’s two-day monetary policy meeting, which is set to begin next week on August 1. Domestic bourses made a weak start to the new F&O series with both Nifty and Sensex declining below their crucial 10,000 and 32,300 levels respectively. Traders remained 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. Markets extended sell-off in afternoon trade and even went to test crucial 9,950 (Nifty) and 32,100 (Sensex) levels, as some anxiety spread among the investors with Niti Aayog chief Amitabh Kant’s statement that the government needs to adopt the model of build, operate and transfer (BOT) for infrastructure projects. These projects then should be given to private companies as the government is incapable of handling the maintenance and operations of such projects. However, the key gauges got some support near those intraday low levels as they trim most of their losses from thereon and ended above their crucial 10,000 (Nifty) and 32,300 (Sensex) levels, as investors continued hunt for fundamentally strong stocks. Traders got some support with report from the prestigious Massachusetts Institute of Technology (MIT), which 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. Traders also get some solace after Standard & Poor’s (S&P) ratings in its latest report said that the credit quality of top corporates which is on the path of recovery is likely to improve over the next two years and will lead to revenue growth. Finally, the BSE Sensex declined 73.42 points or 0.23% to 32,309.88, while the CNX Nifty was down by 6.05 points or 0.06% to 10,014.50.
