Markets to make optimistic start mirroring firm global cues

Indian markets ended slightly higher on Wednesday as the last hour buying offset the sudden fall in benchmark indices. Today, the markets are likely to make optimistic start mirroring firm global cues following dovish monetary policy outlook from the US Federal Reserve. Some support will also come with report that the government has decided to waive registration charges for electric vehicles. The move, aimed at promoting electric vehicles (EVs) in India, comes at a time when the country plans high penetration of such vehicles by 2030. Besides, The Economic Advisory Council to the Prime Minister (EAC-PM) has rejected the claims of former CEA Arvind Subramanian regarding over-estimation of GDP growth after 2011, saying his analysis ignores data on services and agriculture and shows blind trust in a private firm CMIE. However, there may be some cautiousness with report that India's monsoon has progressed more slowly than usual after hitting Kerala nearly a week late. Monsoon rains have been 44% lower-than-average so far in June, delaying the sowing of summer-sown crops and raising concerns that parts of the country could face a worsening drought. Traders may took note of Commerce and Industry Minister Piyush Goyal’s statement that the government will not allow foreign companies to operate in multi-brand segment and necessary action will be taken against people indulging in predatory pricing. Meanwhile, markets regulator SEBI has set various grounds on the basis of which an applicant can be assured confidentiality while filing a plea under the settlement mechanism. For the confidentiality, the regulator will assess whether the co-operation was provided before the applicant had knowledge of any pending proceedings. There will be some buzz in the aviation stocks with report that Crisil Research expects the domestic passenger traffic growth for the industry to be low single digit, a tad above 2% in fiscal 2020. There will be some reaction in NBFCs stocks with a private report indicating that facing a record amount of debt that’s about to mature, India’s non-bank financing companies are finding their troubles worsening as a crisis of credibility starts to bite.

The US markets ended higher on Wednesday after the Federal Reserve indicated that it may cut rates multiple times this year. Asian markets are trading mostly in green on Thursday after the US Federal Reserve left interest rates unchanged overnight but opened the door to a potential rate cut on the horizon.

Back home, Indian equity benchmarks staged recovery to end on a flat note on Wednesday, with Sensex and Nifty reclaiming their crucial psychological levels of 39,100 and 11,650, respectively. After a fabulous start, key indices remained positive for the most part of the session, aided by the Reserve Bank of India’s (RBI) statement that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of five government securities. Traders took a note of a private report that seven million jobs were formalised between 2015 and 2018 because of various measures, including GST, demonetisation, Skill India policies, fixed-term contract, maternity leave enhancement, among others. The report estimated job formalisation to the tune of 11 million between 2018 and 2021. In the last leg of the trade, markets turned volatile on account of weak cues from European markets. Domestic sentiments got cautious amid a private report stating that corporate investment remains a concern in India. But, key indices managed to erase losses, with a private report stating that the Centre is considering the establishment of a special purpose vehicle (SPV) to monitor, screen, and rate commercial borrowers. One of the initiatives the new government will work on in its first 100 days, the SPV, similar to the Goods and Services Tax Network (GSTN) will form a database compiling information from public sector banks (PSBs). Some support also came with a report that the Competition Commission of India (CCI) is conducting a Market Study on E-commerce in the country, in a view of the rapid growth of electronic commerce (e-commerce) and the rising importance of online trade in a large number of goods and services in India. Finally, the BSE Sensex rose 66.40 points or 0.17% to 39,112.74, while the CNX Nifty was down by 0.05 points to 11691.45.