Domestic indices likely to make gap-down opening following sell-off in global markets

Indian markets snapped three-day winning run and ended lower on Thursday owing to weak global cues and selling in Adani Group stocks. Today, the start of the session is likely to be gap-down following a crash overnight on Wall Street coupled with sell-off in other Asian counterparts. Fears of recession resurfaced among investors globally amid persistent concerns about higher-for-longer interest rates. On the domestic front, investors will be eyeing the industrial growth or Index of Industrial Production (IIP) data to be out later in the day for more cues. Foreign fund outflows likely to dent domestic sentiments. The National Stock Exchange's provisional data showed foreign institutional investors (FII) sold shares worth Rs 561.78 crore on March 9. There will be some cautiousness with a private report that retail inflation in India likely eased a bit last month but stayed above the Reserve Bank of India's upper threshold for a second straight month, keeping the central bank on course for further policy tightening. However, some respite may come later in the day as Union Minister for State for Commerce and Industry Anupriya Patel said India's merchandise and services exports combined in the current financial year ending March will be close to $760-770 billion. The country's merchandise and services exports stood at $672 billion in the last fiscal. Traders may take note of Reserve Bank Deputy Governor M Rajeshwar Rao’s statement that India needs to gear up to manage the exchange rate volatility as the country progresses on the path of internationalisation of rupee and freer capital account convertibility. He also said that internationalisation of rupee has its own benefits as well as challenges and risks which the country and the Reserve Bank of India (RBI) will have to deal with. Meanwhile, Finance Minister Nirmala Sitharaman met US Commerce Secretary Gina Raimondo to discuss India's G20 priorities and bilateral cooperation to further boost investment and trade. Gem and Jewellery industry stocks will be Gem and Jewellery Export Promotion Council (GJEPC) said India's gem and jewellery exports grew 24 per cent to Rs 28,832.86 crore in February following a recovery in the Chinese and Middle East markets. The overall gems and jewellery exports during February 2022 stood at Rs 23,326.80 crore. There will be some reaction in metal stocks with a private report that India exported 52% less finished steel from April to February than it did a year earlier, as slowing global demand hit shipments.

The US markets ended sharply lower on Thursday dragged by bank stocks and jitters ahead of Friday's employment report. Asian markets are trading in red on Friday as investors await the closely watched February non-farm payrolls report from the US that could further determine the direction on the Federal Reserve’s rate hikes ahead.

Back home, heavy selling dragged Indian equity benchmarks lower on Thursday, with both Sensex and Nifty closing near their intraday low points, as concerns of a prolonged high-interest rate regime weighed on sentiment. After a slightly positive start, markets soon turned negative, as traders got concerned after India Ratings in a report projected just 4 per cent Gross Domestic Product (GDP) growth for India for the fourth quarter and said the final growth numbers for the full year (FY23) will be lower than the second advance estimate of 7 per cent. Weak trade persisted over the Dalal Street during the entire day, amid negative cues from global markets as Federal Reserve Chair Jerome Powell during a second day of congressional testimony said that policymakers hadn't yet made up their minds on the size of the interest-rate increase later this month. Sentiments were downbeat, amid a private report stating that the growth in the loans to the industry has stagnated with the banking sector clocking an 8.7% growth in January. The moderation is on account of the slower pace of growth in MSME credit, which was the main driver of the growth in loans since April. During the second half of the trading session, indices extended their losses to end lower. The street took a note of another private report stating that India faces a high risk of nighttime power cuts this summer and in coming years, as delays in adding new coal-fired and hydropower capacity could limit the country's ability to address surging electricity demand when solar energy is not available. On the sectoral front, stocks related to infra sector remained in focus, as credit rating agency, India Ratings and Research (Ind-Ra) maintained a stable rating outlook for the overall infrastructure sector for FY24. Finally, the BSE Sensex fell 541.81 points or 0.90% to 59,806.28 and the CNX Nifty was down by 164.80 points or 0.93% to 17,589.60.