The Indian markets showed a smart surge in the final hours of last session trade and the major benchmarks posted gains near to a percent by the end. Today, the start is likely to be in green despite the mixed global cues, though there could be some consolidation too ahead of the long weekend. Traders will be eyeing the conference of a central bankers at Jackson Hole, Wyoming, beginning today, where US Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are both due to speak. The PSU banking stocks will be in focus after the Union Cabinet on Wednesday gave in-principle approval to delegate to a select panel of ministers the task of overseeing their mergers. Meanwhile, Insolvency & Bankruptcy Board of India (IBBI) chairperson has said that resolution of indebtedness of a firm will be the top priority of all constituents of the insolvency and bankruptcy mechanism in the interest of the stakeholders and it will think about liquidation only if it finds that the resolution is hard to come by. An RBI report has stated that India Inc’s overseas direct investment fell over 47 per cent to $ 1.77 billion during July 2017. Indian companies had invested $ 3.35 billion in the same month of last year. There will be some buzz in the media stocks, as the Finance Ministry has said that the rate of Goods and Services Tax (GST) applicable on selling of advertisement space in print media would depend on the terms of the contract between the newspaper, advertisement agency and the client.
The US markets gave up some ground in the last session after surging in the prefious one. Though, the selling pressure remained subdued, limiting the downside for the major averages. Traders reacted to comments made by President Donald Trump at a rally in Phoenix, Arizona that he would build the wall on the border with Mexico even if it meant shutting down the government. The Asian markets have made a mixed start, with some indices trading in red on concerns about the Trump administration’s ability to enact its fiscal agenda. The Japanese market too was in red despite the yen decline.
Back home, Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks, with frontline gauges recapturing their crucial 31,500 (Sensex) and 9,850 (Nifty) levels. Sentiments remained up-beat since morning, as markets made a gap-up opening with a blog on Asian Development Bank’s website, stating that the Goods and Services Tax (GST) 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. Afterwards, markets traded with confidence in a tight band for most part of the session with traders taking encouragement with the Financial Stability & Development Council’s (FSDC) statement 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 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 GST, action being taken to address the twin balance sheet challenge and financial market confidence. Markets extended gains in last leg of trade which mainly helped markets to end near intraday high levels, as some support came with the report that the loan portfolio of micro-finance institutions (MFIs) increased by 26% to Rs 35,045 crore in the first quarter ended June 2017. Some support also came with the launch of the Mentor India Campaign, a strategic nation building initiative to engage leaders who can nurture and guide students at more than 900 Atal Tinkering Labs. Finally, the BSE Sensex surged 276.16 points or 0.88% to 31,568.01, while the CNX Nifty was up by 86.95 points or 0.89% to 9,852.50.
