Domestic indices likely to get negative start on sell-off in global markets

Indian markets ended higher on Monday as softening US 10-year Treasury bond yield, and China's modest economic growth target eased concerns about inflation and rate hikes. Markets were closed on Tuesday on account of Holi. Today, domestic indices are likely to get negative start mirroring the moves across global markets. The US Fed Chief said he anticipates higher rates to be higher than previously predicted. However, foreign fund inflows likely to aid domestic sentiments. The National Stock Exchange’s provisional data showed foreign institutional investors (FII) bought shares worth Rs 721.37 crore on March 6. Some support may come as Finance Ministry data showed that there has been a rise of 133 per cent in collection of major cess and surcharges levied by the Central government on various products during the five-year period between 2017-18 and 2022-23, as it went up from Rs 2,18,553 crore in 2017-18 to Rs 5,10,549 crore in 2022-23. Traders may take note of Moody's Analytics’ statement that India's domestic economy, rather than trade, is its primary engine of growth and the slowdown in economic activity late last year will only be temporary. Besides, the seventh round of India-UK free trade agreement (FTA) talks concluded following technical discussions across 11 policy areas over 43 separate sessions between negotiators from both sides here last month. Meanwhile, Markets watchdog Sebi came out with a framework for the adoption of cloud services by stock exchanges, clearing corporations and other regulated entities. There will be some buzz in the aviation industry stocks as rating agency Icra revised the outlook for the country's aviation sector to stable from negative, citing fast-paced recovery in the domestic air passenger traffic. Sugar stocks will be in focus with a report that India has a cushion to export additional 1 million tonnes of sugar this year if the domestic output reaches the estimated 33.6 million tonnes. There will be some reaction in select auto stocks as the Federation of Automobile Dealers Associations (FADA) data showed that Maruti Suzuki India and Hyundai Motor India saw a dip in their market share in February, while Tata Motors, Mahindra and Kia India witnessed a year on year increase last month. Power industry stocks will be in limelight as rating agency ICRA said India’s thermal plant load factor (PLF) improved to 64 percent in FY2023 from 58.9 percent in FY2022, driven by a strong recovery in electricity demand growth in the country.

The US markets ended sharply lower on Tuesday after the US Fed Chief remained firm on monetary policy tightening course until core inflation is down to its 2 per cent target. Asian markets are trading mostly in red on Wednesday as traders anticipated a larger rate hike at the next policy meeting.

Back home, Indian equity benchmarks ended higher for a second session in a row on Monday on the back of gains in Utilities, Power and Oil & Gas stocks following strong global trends. Markets made an optimistic start and extended gains as the day progressed, as traders took encouragement with Commerce and Industry Minister Piyush Goyal’s statement that the country’s goods and services exports are expected to cross $750 billion this fiscal despite the global economic uncertainties. In 2021-22, the country's goods and services exports touched an all-time high of $422 billion and $254 billion respectively, taking the total shipments to $676 billion. Some support also came with Union minister of state for micro, small and medium enterprises (MSMEs) -- Bhanu Pratap Singh Verma’s statement that the central government will increase the number of technology centres to provide tools, trained personnel and consultancy to MSMEs for stimulating growth of industries. Verma highlighted the crucial role played by the sector during the COVID-19 crisis. However, in the second half, markets trimmed some of the intraday gains, as traders got anxious after the Reserve Bank of India said India’s foreign exchange reserves dropped $325 million to $560.942 billion as of February 24, making it the fourth consecutive week of decline in the kitty. Some cautiousness also came as External Affairs Minister S Jaishankar conveyed to his Chinese counterpart Qin Gang at a meeting that the state of India-China relations is ‘abnormal’ as their talks focused on addressing the challenges in bilateral ties, especially that of peace and tranquility in the border areas. But, markets managed to end the session higher, as some optimism remained among traders with a report from the National Statistical Office (NSO) showing that the annual per capita (net national income) at current prices is estimated at Rs 1,72,000 in 2022-23, up from Rs 86,647 in 2014-15, suggesting an increase of about 99 per cent. Some support also came as Joint Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Sanjiv Singh stated that the government is working to bring a national retail trade policy for brick and mortar retail traders, in order to promote ease of doing business. He added that the policy would also help in providing better infrastructure and more credit to traders. Finally, the BSE Sensex rose 415.49 points or 0.69% to 60,224.46 and the CNX Nifty was up by 117.10 points or 0.67% to 17,711.45.