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Markets to open slightly in green on Tuesday
Jul-23-2019

Indian markets extended losses for third straight session on Monday led by losses in financial services stocks amid concerns over foreign fund outflows and weak global cues. Today, the start of session is likely to be slightly in green tracking positive trend in global markets. Some support will come with report that betting on the infrastructure theme, Minister of Information and Broadcasting Prakash Javadekar said that in the next five years, the government is planning to invest around Rs 100 lakh crore in that sector. Some support will also come with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that he sees signs of a recovery in economic growth and further monetary policy steps will depend on incoming data. Besides, the government has set a target of adding 1.3 crore income tax filers in the current financial year against 1.1 crore new filers last year. However, there may be some cautiousness with report that investments through participatory notes (P-notes) in the capital market slipped to Rs 81,913 crore in June after posting growth for the previous four months. Traders may take note of report that the Economic Advisory Council to the Prime Minister (EAC-PM) member Rathin Roy has urged the government to issue a white paper on medium-term fiscal framework, arguing that it would be difficult to meet the budgetary tax collection target for 2019-20. He also expressed his reservations over the government’s decision to start raising a part of its gross borrowing programme from external markets in foreign currencies. There will be some buzz in the power stocks with report that the private transmission industry wants the government to initiate a number of policy changes which would give them more flexibility in network planning. There will be some reaction in sugar stocks with report that outstanding payment dues to sugarcane farmers have shot up by 54 times in just one year, as sugar mills grapple with tight liquidity amid a surge in production. Sugar mills have held back Rs 15,565 crore of the sugarcane-growing farmers in 2018-19, which was Rs 285 crore in the previous year. There will be some important earnings announcements too to keep the markets buzzing.

The US markets closed in green on Monday as investors awaited key central bank meetings for direction on the path of interest rates and earnings from marquee names including Facebook and Amazon that are set to report this week. Asian markets are trading higher on Tuesday as investors braced for a busy week of US corporate earnings and potential developments in trade negotiations.

Back home, Extending southward journey for third straight session, Indian equity benchmarks ended the Monday’s trade with a cut of over half a percent. Markets started the session on pessimistic note, as sentiments remain dampened with the Reserve Bank of India’s (RBI) data showing that after touching record highs, the foreign exchange reserves declined by $1.113 billion to $428.797 billion in the week to July 12 - the first fall after four consecutive weeks of gains - due to a fall in foreign currency assets. Markets traded in tight band throughout the day as continuous selling by foreign investors post the presentation of the Budget on July 5 and corporate results for April - June 2019 quarter that failed to enthuse investors, dented the overall market sentiment. Some cautiousness also crept in with report that the Ministry of Statistics and Programme Implementation indicated as many as 345 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.28 lakh crore owing to delays and other reasons. Traders shrugged off reports that Asian Development Bank (ADB) has lowered the inflation forecast for India during the current financial year by 0.2 percentage points to 4.1 percent, on the back of gain in rupee and cut in the country's GDP projection. The market participants overlooked NITI Aayog Vice Chairman Rajiv Kumar’s statement that India will achieve Gross domestic product (GDP) growth of 8 percent plus from fiscal year 2020-2021 onwards as structural reforms such as the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) are set to produce the benefits. Meanwhile, SEBI has tweaked the formats for limited review and audit report of listed entities in order to align them with the revised auditing standards. This will also be applicable to entities whose accounts are to be consolidated with the listed entity. Finally, the BSE Sensex lost 305.88 points or 0.80% to 38,031.13, while the CNX Nifty was down by 73.05 points or 0.64% to 11,346.20.

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