Markets to get pessimistic start; TCS result eyed

Indian markets snapped six-day losing streak and ended higher with gains of over one and half a percent each, led by gains in telecom and banking stocks. Today, the markets are likely to make a pessimistic start amid mixed cues from Asian peers. Investors will be looking ahead to the start of July-September quarter earnings season, with IT bellwether TCS reporting its Q2 numbers later in the day. There will be some cautiousness with a private report that a workforce analysis of listed companies reveals that the job loss in public sector was one of the worst in the recent times. In contrast to an increase of 9.2 per cent headcount in private sector, the public sector saw a decline of 2.6 per cent in FY19. Traders may take note of CARE Ratings’ report that even as the announcements by Finance Minister Nirmala Sitharaman are expected to boost investor sentiment in the near term, the overall economic improvement is expected by the next fiscal. It added that the investment is only expected to pick up depending on sustained rise in consumption demand over a period. However, some support may come later in the day with report that in line with schemes like Start-up India and Stand-up India aimed at young entrepreneurs, Agriculture Minister Narendra Singh Tomar will launch the Yuva Sahakar-Cooperative Enterprise Support and Innovation Scheme 2019 with an annual outlay of Rs 100 crore.  Meanwhile, with overall financial flows to the commercial sector declining sharply by 88 per cent during the first six months of the current financial year amid the slowdown in the economy, Finance Minister Nirmala Sitharaman has called for a meeting with CEOs of public sector banks (PSBs) next week to consult on ways to boost credit offtake. Banking stocks will be in focus with a private report that with bad loans having been largely recognised, the worst may be over for banks but second quarter earnings could still be muted. There will be some reaction in logistics stocks with ICRA’s report that the domestic logistics sector is set to grow at 8-10 per cent over the medium term with the outlook remaining largely stable. The key drivers for demand pick-up would be the festive season as well as the anticipated revival in infrastructure spending post monsoon and improvement in receivable cycle of contractors.

The US markets ended higher on Wednesday as traders hoped for some kind of deal to come from US-China trade talks beginning on Thursday. Asian markets are trading mixed on Thursday amid no signs of progress in trade talks between the US and China.

Back home, Indian equity bourses broke 6-day losing streak on Wednesday to end higher. After a cautious start, indices traded subdued in early morning, as India has come down by 10 places to rank 68th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF) from 58th rank earlier. It is mainly due to improvements witnessed by several other economies. But, markets gained traction in late noon deals, amid a report that the Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi saw keen interest from foreign investors in emerging areas such as REITs and InvITs, which have a total asset size of more than $10 billion. In the second half of the session, benchmarks extended their gains to settle near their intraday high points, tracking firm European markets. Market participants also took support with a report stating that the Indian economy needs a boost and a slip in the fiscal deficit by 40 to 50 basis points will be a good trade-off if it propels demand. Separately, in line with the government’s aim to make India digital, the Reserve Bank of India (RBI) has directed all state/UT Level Bankers Committees (SLBCs/ UTLBCs) to identify one district in their respective states/ UTs on a pilot basis in consultation with banks and stakeholders, to expand digital payments ecosystem. Finally, the BSE Sensex gained 645.97 points or 1.72% to 38,177.95, while the CNX Nifty was up by 186.90 points or 1.68% to 11,313.30.