Markets to get positive start on sanguine global cues

Indian markets ended lower with losses of round half a percent on Wednesday amid cautiousness as US President Donald Trump once again warned India that its high tariffs were not acceptable. Today, the markets are likely to make an optimistic start tracking firm global cues. Traders will be getting encouragement with Commerce and Industry Minister Piyush Goyal’s statement that foreign direct investments (FDI) into the country grew 3 per cent to $6.95 billion in April. During 2018-19, the country recorded the highest-ever total FDI inflow of $64.38 billion, which is 6 per cent higher as compared to 2017-18. Also, there will be some support with CBDT Chairman Pramod Chandra Mody’s statement that the government has re-calibrated and fixed the direct taxes collection target for this financial year at Rs 13.35 trillion, a task that is difficult, but achievable. However, there may be some cautiousness with a private report that the country's real GDP growth is likely to be 6.7 percent from 6.9 percent forecasted earlier in FY20 citing the continuing slowdown in consumption demand and warned that a revival is unlikely before FY21. Besides, Fitch Ratings stated that India's budget outlined some reforms that could support the economy, but its fiscal stance was left broadly unchanged with no plans for meaningful consolidation. Meanwhile, the Union Cabinet has approved a bill that seeks to merge 13 central labour laws into a single code which would apply on all establishments employing 10 or more workers. There will be some buzz in the telecom stocks with report that telecom operators intend to install over 57,500 towers for mobile connectivity in rural areas during the financial year 2019-20. There will be some reaction in hospital industry stocks with ICRA’s report stating that the hospital sector is seeing better days ahead after more than two years of subdued performance, mainly due to several regulatory measures, including the cap on prices of stents and knee implants by the National Pharmaceutical Pricing Authority (NPPA).There will be some result reactions too, to keep the markets in action.

The US markets closed higher on Wednesday after Federal Reserve Chairman Jerome Powell set the stage for the central bank to cut interest rates to bolster flagging growth. Asian markets are trading in green in early deals on Thursday following overnight gains on Wall Street.

Back home, Indian equity indices saw a further fall on Wednesday’s trading session, with the Sensex and the Nifty closing below their crucial psychological levels of 38,600 and 11,500, respectively. After a cautious start, the markets traded in negative terrain during the whole day, affected with Moody’s Investors Service’s statement that weak growth prospects for India will complicate the government's fiscal consolidation efforts, weighing on the sovereign's credit quality. Sentiments also remained downbeat, after CRISIL in its earnings preview stated that India Inc will see the slowest quarterly revenue growth in two years, which will more than halve to 6 percent from 14-15 percent, due to a deceleration in consumption and lower realisations. Bears held their tight grip on the markets in the second half of the trading session, amid weak cues from European markets. Market participants got anxious, amid a private report showing that India's retail inflation is likely reached an eight-month high in June on rising food prices, but stayed under the Reserve Bank of India's medium-term target of 4% for an eleventh straight month. Investors paid no heed towards the latest finance ministry data report which showed that deposits in bank accounts opened under Jan Dhan scheme, launched about five years ago by the Modi-government, have crossed the Rs 1 lakh crore mark. Finally, the BSE Sensex fell 173.78 points or 0.45% to 38,557.04, while the CNX Nifty was down by 57.00 points or 0.49% to 11,498.90.