Till debt does US apart!

Promises make debt, and debt makes promises - Dutch Proverb.

Monday morning brings a promising start. After an acrimonious tug-of-war that sent world markets into a tizzy, the US political leaders have finally managed to carve out a deal to raise the nation’s debt and avert a default. The perilous stalemate is over but the deal still needs to go through the Congress by midnight Tuesday or the US will breach its debt ceiling. President Obama admitted that it was not the kind of deal that he would have preferred.



With a major cloud of uncertainty clearing out, global markets will heave a huge sigh of relief. Asian markets and US stock futures are up smartly. The dollar is also up against the yen and Swiss franc. Gold has retreated from a record high. Against this largely positive backdrop, we expect Indian indices to rise at start. We could also close the day higher, spurred by the global euphoria over the US debt deal.

Indian markets will also keep a close eye on the monsoon session of Parliament. The Government has promised to table a spate of crucial bills. It remains to be seen how many of them are cleared by the parliament. Monthly auto sales, trade data and manufacturing PMI report will also have some bearing on sentiment.

FIIs were net sellers of Rs 4.64bn in the cash segment on Friday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs 4.12bn on the same day. FIIs were net buyers of Rs 5.74bn (provisional) in the F&O segment.

The foreign funds were net buyers of Rs 4.17bn in the cash segment on Thursday, according to the final SEBI data. Mutual Funds were net buyers of Rs 1.58bn on the same day.

Results Today: GSK Consumer, Havells India, Indraprastha Gas, Pfizer India, Shree Cement, Sun TV and Triveni Engineering.

Global Data Watch: China manufacturing PMI, UK manufacturing PMI, Eurozone manufacturing PMI, US manufacturing PMI, US construction spending and EU unemployment rate.