Markets to make negative start on sluggish global cues

Markets closed higher on Tuesday as all sectoral indices were higher except IT which lost over half a percent. Today, the start of the session is likely to be on negative side on weak global cues. There will be some cautiousness with Chief Economic Advisor K V Subramanian’s statement that there is a need to tap foreign capital to accelerate growth from the current level of 7 per cent to 8 per cent. He added that achieving $5-trillion economy by 2024-25 is possible although the goal is slightly stretched. Traders may also remain concern on report that Tax officials detected Rs 37,946 crore worth of tax fraud in 2018-19 and Rs 6,520 crore in the April-June period of the current financial year after the GST implementation. However, traders may take some support later the day With Finance Minister Nirmala Sitharaman’s statement that total bad loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in the 2018-19 fiscal on the back of steps taken by the government. The government has instituted a comprehensive 4R's strategy for recognition of non-performing assets (NPAs) transparently, resolution and recovery of value from stressed assets, recapitalising of public sector banks (PSBs) and reforms in PSBs so as to reduce their bad loans. Meanwhile, the government has invited proposals from entities for the deployment of electric vehicle charging infrastructure in big and smart cities. Proposals are invited from entities that intend to develop EV charging infrastructure in million-plus cities as per the 2011 census; and smart cities as notified by the Ministry of Housing and Urban Affairs. There will be some buzz in the solar stocks on report that a total of 80.46 GW of renewable energy capacity has been installed in the country as on June 30, 2019 which includes 29.55 GW from Solar & 36.37 GW from Wind power. The retail sector stocks will also keep buzzing with Commerce and industry minister Piyush Goyal stating that India’s foreign direct investment (FDI) norms in the multi-brand retail sector are a very well thought out policy which are unlikely to change any time soon.  He said the 49 per cent FDI threshold in multi-brand retail must be respected in letter and spirit by all foreign brands. There will be some earnings announcements too to keep the markets buzzing.

The US markets settled lower on Tuesday after President Donald Trump said an agreement with China on trade tariffs has a long way to go.  Asian markets are trading lower in early deals on Wednesday following overnight developments on the US-China trade front.

Back home, Indian equity indices remained in good mood on Tuesday, with Sensex and Nifty closing above their crucial psychological levels of 39,100 and 11,650, respectively. Markets made a cautious start of the day, as India’s exports fell by 9.71% in the month of June 2019 over the same period in the previous year, due to a fall in shipments of gems and jewellery, engineering goods and petroleum products. However, markets soon staged sharp recovery, taking support with Finance Minister Nirmala Sitharaman’s statement that GST collection of states and union territories (UTs) increased to Rs 5.18 lakh crore in the full financial year 2018-19, up from Rs 2.91 lakh crore collected in nine months of 2017-18. Key indices extended their gains in the last hour of the trade, tracking firm European markets. The street remained positive with Commerce and Industry Minister Piyush Goyal’s statement that India is open to ideas from all sides to strengthen investors' confidence so that they can invest and participate in the country's development. He added that the government aims to give confidence to international investors, with the best of technologies, to come to India and invest. Some support also came with a private report stating that domestic catalysts suggest a largely positive outlook for the bond market in the short-term, despite the recent correction in Indian bond yields. Finally, the BSE Sensex gained 234.33 points or 0.60% to 39,131.04, while the CNX Nifty was up by 74.25 points or 0.64% to 11,662.60.