Markets are likely to remain volatile today

Passage of GST Bill, developments in China will be keenly watched

Markets are likely to witness another choppy session today as investors eye the outcome of the last day of the monsoon session of Parliament for passage of the GST (Goods and Services Tax) Bill along with cues from other global markets.

According to reports, if the bill is not passed in Rajya Sabha, the government could call a short special session of both Houses of Parliament to pass the GST Bill. CLICK HERE FOR THE FULL STORY

On Wednesday, the Sensex fell 354 points or 1.3% to close at 27,512 levels and the Nifty declined 113 points or 1.3% to close below the crucial level of 8,350 at 8,349. The broader markets underperformed their largecap peers. BSE Midcap and Smallcap indices lost 2.5% and 2% each. The market breath ended weak on the BSE with 2,147 declines versus 691 advances. CLICK HERE FOR THE FULL STORY

"Markets have already suffered by all means due to frequent logjams, and whole monsoon session of parliament got washed off amid all the political mayhem. This has left the market clueless as there is no indicator to the initiatives presented by government to be turning in a practical mode. Nifty Future is trading in broad range of 8330 – 8670 levels. On daily chart, it is looking strong and expected to break the range on the higher side," said Rohit Gadia, Founder & CEO, CapitalVia Global Research.

"On the upside, if it manages to break and sustain above its important resistance level of 8670 on closing basis, its next resistance is at 8800 levels and on the down side immediate support level is at 8450 & next important support level to look after is 8330 . But if GST Bill is not cleared in Thursday's session, market can see a further correct by 2% - 3%," he adds.

In other economic news, industrial production (IIP) in June rose 3.8% over a year ago - the highest rate in four months - mainly pushed by the manufacturing sector. A recovery in the mining and electricity sectors, though, remained elusive, showed official data released on Wednesday.

"The highlight was the spectacular growth in consumer durable goods as it grew by 16%, only its second positive number in the last 12 months. It seems that production in consumer durables is stabilising and we are likely to see some improvement in the second half due to rural demand picking up on better than expected demand. We would expect industrial production to improve in the second half of the fiscal aided by some revival in demand while still contingent on a push to stuck projects and reforms,” said Rishi Shah, an economist with Deloitte in a note.

GLOBAL MARKETS

Asian shares and the dollar edged higher in early trade on Thursday, with investors cautiously watching China's next move after it allowed the yuan to decline for two straight sessions. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3%, taking heart from a late recovery on Wall Street that saw two out of three main indexes end in positive territory.

Japan's Nikkei stock index was up 0.3%, shrugging off downbeat capital expenditure figures. Japanese data released before the market open showed Japan's core machinery orders fell a greater-than-expected 7.9% in June, down for the first time in four months.

China's currency fell to a four-year low on Wednesday, slumping for a second day. Reports suggest that the move to devalue the yuan reflects a growing clamour within Chinese government circles for a devaluation of perhaps up to 10% to help struggling exporters.


with Reuters inputs