Markets likely to open in green on Tuesday

Indian markets ended lower Monday dragged by selling in financials and auto stocks. Today, markets are likely to open in green following positive global cues. Traders will be taking encouragement with Care Ratings’ report that the country's gross domestic product (GDP) growth is likely to be 8.8 to 9 per cent in the current financial year, driven by agriculture and industry sectors. The country's economy had contracted by 7.3 per cent in fiscal 2020-21. Some support will come as the government's total tax collection in the April-June quarter grew about 86 per cent to more than Rs 5.57 lakh crore. Out of the total amount, collection of net direct tax stood at Rs 2.46 lakh crore and of indirect tax was at Rs 3.11 lakh crore. However, there may be some concern as Moody's Analytics said the second wave of COVID-19 may have a more lasting damage on the Indian economy and exports will once again be the foundation for recovery. In its report titled 'APAC Economic Outlook: The Delta Roadblock', Moody's Analytics said social distancing is weighing on the current quarter, but economic recovery will resume by the year-end. There will be some buzz in the banking stocks as Minister of State for Finance Bhagwat K Karad said non-performing assets (NPAs) or bad loans of banks have declined by Rs 61,180 crore to Rs 8.34 lakh crore at the end of March 31, 2021, as result of various steps taken by the government. There will be some reaction in real estate stocks with a private report stating that around $18 billion loans of the overall lending to the real estate sector by banks, NBFCs and housing finance companies (HFCs) are under severe stress. Glenmark Life Sciences’ Rs 1,514 crore initial public offering (IPO) opens for subscription on Tuesday, July 27. The issue consists of a fresh issue of equity shares worth Rs 1,060 crore and an offer for sale by existing shareholders worth R 453 crore. Investors can bid for Glenmark Life Sciences IPO at the fixed price band of Rs 695 – 720 per share in a bid lot of 20 shares. There will be some important earnings announcements too to keep the markets buzzing.

The US markets ended higher in choppy trade on Monday as investors avoided making new, bold bets before this week's Federal Reserve policy meeting, which might offer clues on the outlook for monetary policy. Asian markets are trading mostly in green on Tuesday with traders keeping at least half an eye on the United States where major companies report earnings and the Federal Reserve meets on policy this week.

Back home, Indian equity benchmarks were traded in lacklustre mood and ended with losses on Monday dragged down by losses in index heavyweights SBI, Reliance Industries, Mahindra & Mahindra amid a largely subdued trend in global markets. Indian markets started the day marginally in red, as fears of a third wave and the spread of Delta and Delta plus variant dampened sentiments in markets. However, markets traded flat with a positive bias in morning deals as Commerce and Industry Minister Piyush Goyal expressed confidence that India will continue to attract high foreign direct investment (FDIs) in the current financial year. Traders took some support as ICRA Ratings in its latest report stated that the government is set to exceed the budgeted tax collection target of Rs 22.2 lakh crore for 2021-22, led by indirect taxes, primarily taxes on petroleum products. Some support also came as investments in the Indian capital markets through participatory notes (P-notes) rose to Rs 92,261 crore till the end of June, making it the highest level in 37 months. This also marks the third consecutive monthly growth. But, markets erased gains and continued their lackluster trade in afternoon session, as traders were worried with report by Omidyar Network India and Crisil stating that the second COVID-19 wave has intensified pressure points for small and mini NBFCs, as they did not get the benefit of the RBI's liquidity measures announced last year.  Some concern also came with reports that foreign portfolio investors (FPIs) offloaded Indian equities to the tune of over Rs 5,689 crore in July so far as they continued to adopt a cautious stance in view of various domestic and global factors. During July 1-23, FPIs took out Rs 5,689.23 crore from equities, as per depositories data. Meanwhile, the provisional commerce ministry data showed that the country's exports grew 45.13 per cent to $22.48 billion during July 1-21 on account of healthy growth in sectors such as gems and jewellery, petroleum and engineering. Imports also rose 64.82 per cent to $31.77 billion in the said period, leaving a trade deficit of $9.29 billion. Finally, the BSE Sensex fell 123.53 points or 0.23% to 52,852.27, while the CNX Nifty was down by 31.60 points or 0.20% to 15,824.45.