Sensex, Nifty to make negative start on Thursday

Indian markets snapped two-day losing streak and ended in green on Wednesday mainly on the back of late buying by market participants. Today, the start of the August month is likely to be negative amid mixed cues from Asian peers and lackluster domestic data. There will be concerned with the government data showing that growth of eight core industries dropped to 0.2 per cent in June mainly due to a contraction in oil-related sectors as well as in cement production. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity - had expanded by 7.8 per cent in June last year. Also, there will be some cautiousness with the Controller General of Accounts (CGA) data showing that the government's fiscal deficit touched Rs 4.32 trillion for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal. In absolute terms, the fiscal deficit, the gap between expenditure and revenue, was Rs 4.32 trillion at June-end. However, some support may come later in the day with report that India's monsoon rains in the week ending on July 31 were above average for the second time since the start of the season on June 1, helping farmers accelerate the planting of summer-sown crops and easing concerns of drought. Traders may also take note of Commerce and Industry Minister Piyush Goyal’s statement that India’s exports will have to contribute $1 trillion as the country aims to become a $5 trillion economy in the next few years. Meanwhile, the government has decided to hike the subsidy on sulphur fertiliser to Rs 3.56 per kg and keep the support unchanged for other non-urea nutrients for promoting balanced use of farm supplements. The auto sector stocks will also be in action, reacting to their monthly sales numbers. Besides, Ind-Ra said that automobile manufacturers in the country slashed production by 11 percent in April-June period this fiscal over the year-ago period amid the industry facing the worst slowdown with sales declining month after month. There will be lots of earnings reaction based on the performance of the companies, to keep markets buzzing.

The US markets declined on Wednesday after the Federal Reserve signaled caution on future interest-rate cuts shortly after the central bank lowered rates for the first time in a decade. Asian markets are trading mixed on Thursday as a private survey showed Chinese factory activity contracted in July.

Back home, Indian equity bourses managed to close in green terrain on Wednesday after a volatile session.  The start of the day was negative, amid reports that the bilateral relationship between India and the US, which has continuously experienced an upward trajectory for the last two decades, faces the risk of a downward spiral unless urgent steps are taken by both the countries to resolve their trade differences. Adding more worries, a private report stated that despite the policymakers' efforts to revive the sagging growth momentum, the economy is set to print in a 5.7 percent uptick in the June quarter and is likely to bottom out from there. It noted that India presents a picture of short-term despair and medium term hope. In the last leg of trade, indices staged recovery to end higher, aided by reports that India received the foreign direct investments (FDI) inflow of $64.37 billion during the financial year 2018-19 (FY19). As per the Annual Report 2018-19 of the Department for Promotion of Industry and Internal Trade (DPIIT), FDI worth $286 billion were received in the country in past five years. The street also got comfort as Minister of Petroleum and Natural Gas & Steel Dharmendra Pradhan launched Atal Community Innovation Centre (ACIC) in New Delhi, to encourage the spirit of innovation at the community level. This initiative aims to encourage the spirit of innovation through solution-driven design thinking to serve society. Finally, the BSE Sensex gained 83.88 points or 0.22% to 37,481.12, while the CNX Nifty was up by 32.60 points or 0.29% to 11,118.00.