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Markets to see some recovery with a positive start

The Indian markets declined in last session following the weakness in Asian counterparts and disappointed by the outcome of the G20 summit over the weekend in Germany on trade and climate change. Today, the start is likely to be in green and some recovery can be seen as the Asian peers have made a positive start. Traders will be getting support with Cabinet clearing four supporting GST legislations, paving the way for their introduction in Parliament. Once approved by Parliament, the states would start taking their SGST bill for discussion and passage in the respective state assemblies. There will be some somberness in defence, ports and coal sector stocks on report that, as many as five sectors including them failed to attract any foreign direct investments during the April-December period of the current fiscal. There will be buzz from the primary market too, where the much awaited Avenue Supermarts, the operator of retail chain D-Mart will get listed. The company’s Rs 1,870 crore initial public offering got overwhelming response.

The US markets went through another lackluster session and ended flat with a negative bias, as many traders stuck to the sidelines amid a quiet day on the U.S. economic front and shrugged off disappointment with the outcome of the G20 meeting. The Asian markets have made mostly a positive start and barring the Japanese market, which opened after a long weekend, all are trading in green, as the dollar declined after Federal Reserve officials reignited the debate on the timing of further policy tightening.

Back home, Indian equity markets commenced the week on a sluggish note as the benchmarks showcased an unenthusiastic performance on Monday and settled with moderate cuts of over quarter percent. Marketmen turned cautious over the Centre's future reform policies in view of appointment of Yogi Adityanath as the Chief Minister of the country's most populous state. The MP from Gorakhpur, who lacks administrative experience, was unanimously elected the BJP legislature party leader at a meeting of the newly elected MLAs, in a move that took many by surprise. Sentiments remained subdued with a report that the all India Consumer Sentiments Index, measured by the BSE and CMIE, has hit a one-year low at 92.25 compared to 99.65 a year ago. This comes even as the wholesale price index based inflation jumped up to a 39-month high of 6.55%. However, losses remained capped with the report that the Cabinet approved four bills to implement a planned Goods and Services Tax (GST) bills, paving the way for Prime Minister Narendra Modi to implement the landmark tax reform from July. The four bills are likely to be taken up by Parliament this week and a separate state GST bill in state assemblies later. Some support also came with the report that the implementation of GST is likely to be fiscally neutral and its impact on inflation is expected to be less than 20 basis points. Further, India has begun the process of dismantling some of the last remaining controls in the foreign direct investment (FDI) framework. The department of economic affairs (DEA) has floated a draft Cabinet note for inter-ministerial consultation to scrap the Foreign Investment Promotion Board (FIPB), in line with a plan announced by finance minister Arun Jaitley in his February 1 budget. Finally, the BSE Sensex declined 130.25 points or 0.44% to 29518.74, while the CNX Nifty was down by 33.20 points or 0.36% to 9,126.85. 

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