Market may continue positive momentum; global cues firm

Moneycontrol Bureau

SGX Nifty indicates positive momentum may continue today. Boosted by metals, IT and pharma stocks the market staged a stellar rally on Wednesday as the Nifty regained 8,500 and Sensex zoomed over 250 points.

Yesterday, FIIs net bought Rs 408 crore in cash while volumes stayed low. FIIs net bought Rs 1,088 crore in Index futures.

Trade deficit remained flat in June, comes in at just over USD 10.80 billion. Imports have fallen more than 10 percent in the first quarter of the current fiscal.

The union cabinet will meet today. In a bid to streamline foreign investment, it could introduce a composite foreign investment cap. This will include FDI, FII and other instruments in various sectors.

Global cues

Asian markets have opened higher this morning as Athens approved the bailout plan. The Nikkei moves higher for a fourth day and has now moved to a new two-week high as investors cheered a weaker currency. The yen is at a 3 week low.

US stocks closed mildly lower as investors continue to focus on Greece. Meanwhile US Federal Reserve Chairman Janet Yellen reiterates last Friday’s statement that the central bank is on pace to raise rates this year if the economy evolves as expected.

In Greece, Athens finally passed strict austerity measures needed to secure a debt deal from its creditors. The verdict comes ahead of Greek payment due to the European Central Bank on Monday. An ECB rates decision is due on Thursday, with President Mario Draghi likely to face questions on a decision on emergency liquidity assistance for Greece.  The central bank is widely expected to increase funding.

European equities ended higher, having pared earlier losses. Both the French CAC and German Dax ended marginally higher.

Asset classes

Dollar has gained on market expectations for a US interest rate hike, possibly as soon as September. Crude prices fall on expectations that increased exports from Iran will add to a global supply glut. Gold prices fall to four-month lows as dollar gains.