Markets to make a positive start on supportive global cues

The Indian markets after dilly-dallying throughout the day, managed a modestly positive close in last session, supported by some firmness in the global markets. Today, the start is likely to be in positive terrain on supportive global cues. Traders will be getting some support with a blog on Asian Development Bank’s website, stating that the goods and services tax in India will benefit the lower and lower-middle income class as it is likely to reduce the tax rate on goods. It further stated that in general, GST is likely to reduce the tax rate on goods as compared to previously, while tax rates on services are expected to increase. Meanwhile, the Financial Stability & Development Council (FSDC) has said that India has macro-economic stability today on the back of improvement in its macro-economic fundamentals and structural reforms with the launch of the Goods and Services Tax (GST). The Council, comprising regulators, took note of the overall stability that has been achieved on the back of improvements in macro-economic fundamentals, structural reforms with the launch of the Goods and Services Tax (GST), action being taken to address the twin balance sheet challenge and financial market confidence. There will be some buzz in the market with BSE compulsorily delisting 200 companies with effect from today and bar promoters of these companies from accessing the securities market for 10 years. There will be some action in the telecom stocks, as the Inter-Ministerial Group (IMG) on telecom industry has hinted on extending the timeline for deferred spectrum payment by telcos to 16 years instead of 10 at present.

The US markets surged in the last session, with tech-heavy Nasdaq rebounding strongly after ending the previous session at its lowest closing level in well over a month, amid easing concerns about recent political turmoil in Washington. The Asian markets have made mostly a positive start, tracking overnight gains on Wall Street, as political tensions took a back seat to optimism about U.S. tax reform and global central bankers’ commitment to loose monetary policy.

Back home, Indian equity benchmarks ended the choppy day of trade with marginal gains, where frontline gauges, despite some hiccups, managed to keep their head above water, as traders opted for bargain hunting after registering losses in the preceding two trading sessions. Markets traded mostly in green through the session with traders taking support with DIPP’s report that FDI flow into the country grew 37% to $10.4 billion during the first quarter of this financial year. India received $7.59 billion FDI during April-June 2016-17. Some support also came with foreign brokerage firm’s report that India is expected to see a modest recovery in GDP growth at 6.6% for the April-June quarter as compared to 6.1% in January-March, which was affected by demonetization. Meanwhile, Prime Minister Narendra Modi is slated to interact with 200 CEOs to attain their views and suggestions to carry forward the 'New India' initiative. The two-day discussion involves groups consisting of around 35 industry leaders and government secretaries, who will deliberate on an array of topics, namely- New India by 2022, Make in India, Cities of Tomorrow, World Class Infrastructure, Doubling Farmers Income and Fixing Finance: Reporting the Financial Sector. However, gains remained capped as some cautiousness crept in on report that leading stock exchange BSE announced on Monday that it will ‘compulsorily’ delist 200 firms this week and bar their promoters from the markets for 10 years as trading in these shares have remained suspended for over a decade. All these companies will be delisted from August 23. Traders also remained concerned with a private survey stating that consumer confidence in India declined in the second quarter of this year amid concerns regarding job security and lower optimism on employment prospects. Finally, the BSE Sensex gained 33.00 points or 0.11% to 31,291.85, while the CNX Nifty was up by 11.20 points or 0.11% to 9,765.55.