Indian markets snapped tow-day winning streak and ended lower with cut of around two percent each amid a selloff across sectors barring energy shares coupled with subdued global markets. Today, the markets are likely to make slightly positive start tracking firm cues from global markets. Traders will be getting encouragement with the government data showing that the retail price inflation rate inched down to 3.15 per cent in July against 3.18 per cent in the previous month, owing to a fall in energy prices. This was the first time in six months that the inflation rate dipped. The marginal dip was despite the food inflation rate rising slightly to 2.36 per cent from 2.25 per cent during this period. Some support may also come with report that the slowdown-hit economy may soon get a booster dose from the government with Finance Ministry working on a stimulus package for the industry may include a slew of financial measures ranging from tax cuts, subsidies and other incentives. Investors will be taking note of a report that the finance ministry may soon consult the law ministry on how best to provide relief to foreign portfolio investors (FPIs) from the super-rich surcharge that was announced in the July 5 budget. Besides, the Reserve Bank of India (RBI) has permitted startups, banks and financial institutions to set up regulatory sandbox (RS) for live testing of innovative products in areas like retail payments, digital KYC and wealth management. There will be some buzz in the housing finance companies (HFCs) stocks with the Reserve Bank of India’s (RBI) statement that HFCs will be treated as one of the categories of NBFCs for regulatory purposes and it will come under its direct oversight. There will be some reaction in auto stocks with report that sales of passenger vehicles declined by 30.98 per cent, the steepest fall in two decades, and industry executives are now counting on a good monsoon to revive them in the festive season.
The US markets ended higher on Tuesday after the United States said it would delay tariffs on some Chinese products, easing concerns that a protracted trade war would harm global growth. Asian markets are trading in green on Wednesday following overnight gains on Wall Street.
Back home, Indian equity bourses witnessed bloodbath on Tuesday, with Sensex & Nifty plunging around 1.65% each. After a cautious start of the day, key indices remained bearish throughout the day, as the government data showed that India's factory output growth, measured by the Index of Industrial Production, slowed down for second straight month to 2.0% in June 2019 as compared to 7% in June 2018 & it is also lower than 3.1% in May 2019. The slowdown was mainly due to poor performance of the manufacturing & mining sectors and a contraction in the capital goods & consumer durables sectors. Traders also remained on sidelines ahead of Consumer Price Index-based inflation data for July later in the day. Markets extended their losses in the second half of the trading session to end near their intraday lows points, tracking weak global markets. Market participants were cautious, amid a private report stating that the Reserve Bank of India is unlikely to vote in favour of overseas sovereign bonds at its meeting with the government. The central bank is concerned that signals by overseas bonds could disrupt local bonds, which are controlled by the RBI. The mood of street remained down, even though Finance Minister Nirmala Sitharaman assured industry leaders that the Reserve Bank of India and the government are on the same page as regards to efforts that are required to boost the economy. Finally, the BSE Sensex lost 623.75 points or 1.66% to 36,958.16, while the CNX Nifty was down by 183.80 points or 1.65% to 10,925.85.
