The Indian markets despite paring all the early gains made a flat closing in the last session, as geopolitical worries lingered and investors waited to hear comments from ECB President Mario Draghi on euro appreciation. Today, the start is likely to be cautious tailing the sluggishness in the regional peers. There will be buzz in the markets as the capital markets regulator, the Securities and Exchange Board of India (Sebi) has proposed compulsory physical settlement in stock derivatives contracts and has sought comments from market participants in a discussion paper, as it is concerned over the suitability of derivatives for retail investors. Meanwhile, industry body Assocham has suggested that Infrastructure and transportation such as road and railway sectors should continue to be exempted under the Goods and Services Tax (GST) regime, as withdrawal of exemption on existing projects will have a negative impact on business revenues. There will be some buzz in steel sector stock, as the Trump administration has said it will initiate new anti-dumping and countervailing duty probe to determine whether imports of stainless steel flanges from India and China are being dumped in the US.
The US markets made mostly lower closing in the last session, the trade remained lackluster and the major averages spent the day bouncing back and forth across the unchanged line, on the heels of the European Central Bank's highly anticipated monetary policy announcement. The Asian markets have once again made a mixed start and some of the indices are down by over a quarter percent after ECB President Mario Draghi cautioned on the common currency’s strength though didn’t expand on any action to address it. The Japanese market was down as Japan’s economy grew less than the government’s preliminary estimate in the second quarter, weighed down by a revision in capital expenditure by companies.
Back home, Indian equity benchmarks ended the volatile day of trade with marginal gains, as simmering geopolitical tensions kept many investors on edge. Markets started the session on optimistic note with both key indices recapturing their crucial 9,950 (Nifty) and 31,700 (Sensex) levels, mainly supported by firm global cues with report that US President Donald Trump and congressional leaders agreed to raise the government debt limit until December, eliminating the risk of a government shutdown for now. Back on regional turf, traders also took some support with a private report stating that economic activity in the country lost some pace amid GST related disruptions but underlying growth momentum remains strong and the country may clock 6.7 percent growth this fiscal. It further said that a number of high frequency growth indicators are indicating that end demand is holding up well and is running counter to the slowdown exhibited in the national accounts. However, markets failed to hold on to their initial gains and pared most of their gains to go home with small gains, as there was some concern in the markets with market regulator Securities and Exchange Board of India (SEBI) expressing its worries over stronger rupee. It has stated that the huge inflow of foreign investments into the country is having an impact on the rupee and regulators need to manage it through a calibrated system. As per SEBI data foreign portfolio investors have invested Rs 44,150 crore in Indian equities and Rs 1.29 lakh crore in debt so far this year. Separately, North Korea’s Minister of External Economic Relations and head of the delegation at the Eastern Economic Forum in Vladivostok, Kim Yong-jae, said that the country will introduce strong countermeasures against the United States’ attempts to exert pressure through strong sanctions. Finally, the BSE Sensex rose 0.77 points to 31,662.74, while the CNX Nifty was up by 13.70 points or 0.14% to 9,929.90.
