Indian markets extended their losses for fifth straight session and ended lower with cut of over one third of a percent each on Wednesday as selloff across sectors intensified amid IMF revising India’s GDP growth forecast downward to 7.0% in 2019. Today, the start of the F&O series expiry session is likely to be marginally in green amid mixed cues from global markets. Traders will be getting some encouragement with report that India improved its ranking in the global innovation index by five places to 52nd in 2019 from 57th position in the last year. Commerce and Industry Minister Piyush Goyal released the Global Innovation Index (GII) rankings. Some support will also come with a private report indicating that the Centre is considering an option to raise $10 billion in one go from its first overseas bond sale as early as October. The government would prefer to sell yen or euro-denominated debt so as to offer lower yields. Traders may take note of Revenue Secretary Ajay Bhushan Pandey’s statement that the revised direct tax target of Rs 13.35 lakh crore is realistic and achievable with the help of economic growth and exchange of data amongst various agencies and wings of the government. However, there may be some cautiousness as the India Meteorological Department (IMD), raising concerns over the output of summer-sown crops, said that monsoon rains were 35% below average in the week ending on July 24, with little rainfall over the central, western and northern parts of the country. Meanwhile, a committee has been constituted under the Department for Promotion of Industry and Internal Trade to examine issues related to FDI in the e-commerce sector. There will be some buzz in the telecom stocks with report that the Digital Communications Commission (DCC) has approved the recommendation of the Telecom Regulatory Authority of India (Trai) to levy a total penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for refusing to provide points of interconnection to Reliance Jio. There will be some reaction in power stocks with report that in a bid to fast-track wind energy projects, the Centre has made certain amendments to the bidding guidelines for such projects. The development assumes significance as the government has set an ambitious target of having 175 GW of clean energy capacity by 2022, including 100 GW solar and 60 GW of wind energy. There will be lots of earnings reaction based on the performance of the companies.
The US markets ended mostly higher on Wednesday as investors cheered solid earnings results from several large companies. Asian markets are trading mixed on Thursday amid a mixed picture for corporate earnings.
Back home, Indian equity benchmarks extended their decline for fifth straight day on Wednesday, with Sensex and Nifty closing below their crucial psychological levels of 37,900 and 11,300, respectively. Key indices made a cautious start of the day, after the International Monetary Fund (IMF) in its World Economic Update revised downward India’s Gross Domestic Product (GDP) growth forecast by 0.3% for 2019 and 2020 to 7.0% and 7.2%, respectively, over its previous projections early this year. Weakness continued on the street amid a private report stating that the economy will not be able to achieve the official forecast of 7 percent growth in FY20, making it a second consecutive year of sub-7 percent expansion. However, markets managed to pare some of their losses in the late leg of the trade to come off from intraday low points, after Finance minister Nirmala Sitharaman signaled that the government may extend the lower corporate tax rate of 25% to all companies, giving India Inc something to cheer about. Her July 5 budget had lowered the rate for most companies but excluded the biggest. Meanwhile, the Minister of State for Finance Anurag Singh Thakur said there is no official estimation of black money in the country, however, it has taken several concrete steps to crack down on illicit funds. Finally, the BSE Sensex lost 135.09 points or 0.36% to 37,847.65, while the CNX Nifty was down by 59.75 points or 0.53% to 11,271.30.
