Benchmarks likely to get positive start tracking gains in global peers

Indian markets ended higher on Monday, mirroring gains in other Asian and European markets amid gains in banking and technology stocks. Today, markets are likely to get positive start tracking gains in global peers. Sentiments will get a boost as the finance ministry said Goods and Services Tax (GST), which completed 7 years of implementation on Monday, has brought happiness and relief to every home through reduced taxes on household appliances and mobile phones. GST, which subsumed about 17 local tax and cesses, was rolled out on July 1, 2017. Besides, the gross GST collection increased 8 per cent to Rs 1.74 lakh crore in June. The government, however, has discontinued the official release of monthly GST collection data. Some support will come as Commerce Secretary Sunil Barthwal said India and Australia are looking at ways to increase cooperation in critical minerals and their processing, besides battery production. Traders will be taking encouragement as Commerce and Industry Minister Piyush Goyal said the Centre is committed to create a business-friendly environment for industry and innovation. The minister said such interactions are key for understanding the challenges faced by the industry and policy-making. Traders may take note of the India Meteorological Department’s (IMD) statement that after an uneven run in June, the southwest monsoon is expected to become vigorous in July with all-India average rain across the country predicted at 106 per cent of the long-period average (LPA), which is above normal. The LPA for the country in July is 28.04 cm and precipitation is expected to be more than that. However, surge in crude oil prices and foreign fund outflows likely to dent sentiments in the markets. The Foreign institutional investors (FIIs) sold equities worth Rs 426 crore on July 1. Oil and gas sector stocks will be in focus with report that the Indian government has raised the windfall tax on petroleum crude to Rs 6,000 ($72) per metric ton from Rs 3,250, effective from July 2. There will be some reaction in defence stocks as according to Foundation for Advancing Science and Technology (FAST India) in collaboration with IIFL Securities, Indian defence firms allocate only 1.2 per cent of their revenue to R&D, markedly lower than the global average of 3.4 per cent. This gap highlights a need for increased investment in innovation to keep pace with global standards. Aviation industry stocks will be in limelight as jet fuel or ATF price was hiked by 1.2 per cent while that of commercial LPG used by hotels and restaurants cut by Rs 30 per 19-kg cylinder in line with international oil price trends. Aviation turbine fuel (ATF) price was hiked by Rs 1,179.37 per kilolitre, or 1.2 per cent, to Rs 96,148.38 per kl in the national capital.

The US markets ended higher on Monday with Megacap growth stocks led by Apple and Tesla lifted the tech-heavy Nasdaq to a higher. Asian markets are trading mostly in green on Tuesday following gains on Wall Street.

Back home, Indian equity benchmarks ended with gains of over half percent on Monday, led by gains in IT, TECK and Basic Materials stocks amid largely positive global cues.  After starting on a quiet note, benchmark indices soon gained ground and gradually climbed throughout the session, as traders took encouragement with the data released by the Controller General of Accounts (CGA) showing that a fiscal surplus of Rs 1.6 trillion in May due to the Reserve Bank of India’s (RBI’s) record dividend transfer narrowed the Centre’s fiscal deficit for the first two months of 2024-25 to Rs 0.5 trillion or 3 per cent of the full-year estimate. Some support also came as Commerce and Industry Minister Piyush Goyal stated that healthy increase in the country's exports, improvement in the current account deficit (CAD) and focus on expanding manufacturing will help the Indian economy register a healthy growth rate. Some solace came after data showed foreign portfolio investors (FPIs) turned net buyers in June, following two months of net outflow. FPIs bought shares worth Rs 26,565 crore on a net basis in the month, driven by political stability and a sharp rebound in markets aided by aggressive retail buying. Domestic markets sustained their upward momentum in late afternoon deals, taking support from the Ministry of Commerce & Industry’s data showing that the output of eight core industries posted a growth of 6.3 per cent in May 2024 as compared with 5.2 per cent a year ago, on the back of healthy expansion in the production of coal, natural gas, and electricity. Sentiments also got boost with report that growth in the Indian manufacturing sector recovered some of the ground lost in May, as the headline Purchasing Managers Index (PMI) figure released by HSBC rose to 58.3 in June from 57.5 in May. The recovery in the sector was based on the back of buoyant demand conditions that spurred the expansions in new orders, output and buying levels. Adding to the optimism, RBI's monetary policy committee member Shashanka Bhide said Indian economy is poised for potentially a stable high growth phase and it is also in a strong position in the context of significant risks that the country is facing. Finally, the BSE Sensex rose 443.46 points or 0.56% to 79,476.19, and the CNX Nifty was up by 131.35 points or 0.55% points to 24,141.95.