Domestic Market View
Markets to make a mildly positive to cautious start
The Indian markets though recovered from the lows of the day but ended marginally in red in the last session. Today, the start of the new week is likely to be mildly in green but cautiousness may prevail ahead of the start of the monsoon session of Parliament. A total of 21 Bills pending in Lok Sabha and 42 Bills pending in Rajya Sabha will be in focus. Markets may get some support with latest edition of the OECD`s economic outlook report on India stating that economic growth is projected to remain strong and India will remain the fastest growing G20 economy. It added that private consumption has been buoyant, boosted by the increase in public wages and pensions and by higher agricultural and rural incomes. Meanwhile, Prime Minister Narendra Modi held a meeting with senior government functionaries to review the country`s current foreign direct investment (FDI) policy, which discussed measures to further liberalise the policy, so as to attract more FDI in various sectors. Markets will also be getting some support with data that India's trade deficit narrowed more-than-expected to $12.96 billion in June as gold imports nearly halved from a month earlier. There will be lots of important earnings announcements to keep the markets buzzing for the day
Domestic Market Overview
Benchmarks snap four days gaining streak on Friday
Record hitting streak comes to an end on Friday, with frontline gauges settling tad below their neutral lines, as traders opted to book some of their profits after four days of continues rally. Initially, Sensex opened at a new high of over 32,100 mark, while Nifty too hit a new peak of 9,900 mark for the first time ever on strong buzz that a policy rate cut may be on the anvil after inflation touched a ‘record low’. However, markets failed to hold on to their gains and entered into red terrain, breaching their respective crucial levels, as traders remained concerned with disappointing earnings by the Tata Consultancy Services, India’s largest software services exporter whose quarterly profit fell 10 percent sequentially, while revenues declined 0.2 percent. Moreover, another IT bellwether firm Infosys reported a 3.3 per cent sequential drop in net profit at Rs 3,483 crore for June quarter. Investors also remained on sidelines ahead of high-profile meeting chaired by Prime Minister Narendra Modi to review the country’s foreign direct investment policy, where further easing of restrictions may also be discussed.
Losses remained capped with report that India is ranked 116 out of 157 nations on a global index that assesses the performance of countries towards achieving the ambitious sustainable development goals (SDGs). India with a score of 58.1, is behind countries such as Nepal, Iran, Sri Lanka, Bhutan and China. The SDG Index and Dashboards Report shows world leaders need to strengthen their efforts to realize the 17 global goals. Some solace also came with report that the wholesale price index based inflation fell to 0.9 percent in June from 2.17 percent in May. The fall in WPI as well as CPI inflation raised hopes for rate cut by RBI in August monetary policy
Global Market Overview
Asian markets end mostly in green on Friday
Asian equity markets ended mostly in green on Friday as investors digested Fed Chair Janet Yellen's measured comments on the second day of her testimony before Congress and looked ahead to earnings from a slew of US banks due later in the day for direction. Yellen on Thursday spoke about the dual risks of inflation and the factors holding down productivity growth. She said that it would be quite challenging for the United States to reach the three percent growth target set by President Donald Trump. Chinese shares ended tad higher as Fitch Ratings maintained the country's sovereign ratings at 'A+' with 'stable' outlook, but warned a further increase in economy's overall leverage and tighter monetary conditions will constrain growth prospects over the medium term. Hong Kong stocks finished higher, extending their gains to a fifth-straight day following another record close on Wall Street. Further, Japanese shares closed marginally higher ahead of a three-day weekend.
US markets closed higher led by gains in tech stocks
The US markets closed higher on Friday, with several indexes posting all-time records, led by large gains in the tech sector. This was despite a mixed batch of second-quarter earnings from three major banks. The Atlanta Federal Reserve’s GDP Now forecast model showed that the US economy is expanding at a 2.4 percent annualized pace in the second quarter based on unexpectedly weak data on retail sales and consumer prices in June. The latest second-quarter GDP estimate was lower than the previous figure of 2.6 percent calculated on Tuesday. Friday’s figure was the Atlanta Fed model’s lowest yet for US gross domestic product in the second quarter. Its initial reading was 4.3 percent on May 1.
On the economy front, the cost Americans pay for goods and services was little changed in June, larger reflecting lower gasoline prices but also showing that a recent surge in inflation has crested. More important, the rate of inflation over the past 12 months slowed to 1.6% in June from 1.9% in the prior month, and it is down from five-year high of 2.7% just five months ago. A stripped-down measure of inflation that excludes the volatile food and energy categories rose 0.1% in June. Over the past 12 months the so-called core CPI is up 1.7%, unchanged from the prior month. Industrial production rose 0.4% in June, a touch ahead of expectations, as mining output surged 1.6%. Utilities output as flat and manufacturing output edged up 0.2%. Over the last 12 months, industrial production is up 2%. Capacity utilization rose to 76.6% from 76.4%, which was slightly below expectations
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