Domestic indices likely to open with minor gains; RIL Q4 results eyed

Indian markets managed to eke out minor gains on Thursday with support from auto, capital goods and power stocks. Today, domestic indices are likely to open with minor gains on the last trading day of week. Investors will react to HCL Technologies' Q4 results, which came largely in-line with Street expectations. Weakness in global peers likely to weight on sentiments. Foreign fund outflows likely to dent domestic indices. National Stock Exchange's provisional data showed foreign institutional investors (FII) sold shares worth Rs 1,169.32 crore on April 20. Traders will be concerned as a report by Acuite Ratings stated that India's economic activity is expected to decline and witness a lower growth print in FY24 on the back of a buoyancy in the services sector, moderation in inflation and the consistency in public sector capital expenditure. Some cautiousness will come as retail inflation for farm labour and rural workers rose marginally to 7.01 percent and 6.94 percent, respectively, in March compared to February this year, mainly due to higher prices of certain food items. Some concern may come as minutes of this month’s Monetary Policy Committee (MPC) meeting showed India’s current rate tightening cycle may not be over as more hikes could be warranted to align inflation towards the central bank’s medium term target of 4%. Meanwhile, the Centre has imposed a definitive anti-dumping duty of $2.05 per square metre on luxury vinyl tiles imports from China and $1.44 per square metre on imports from Taiwan based on the recommendations of the Commerce Ministry. The anti-dumping duty would be valid for five years. Baking stocks will be in focus as Reserve Bank of India data showed that banking system’s credit rose by 15.7 per cent year-on-year (YoY) basis in the fortnight ended April 7 to Rs 138.45 trillion, while advances grew by Rs 1.7 trillion in the reporting fortnight. Investors await more of corporate earnings from India Inc for domestic cues, with index heavy weight - Reliance Industries (RIL) all set to report its numbers post-market hours today.   

The US markets ended lower on Thursday after disappointing quarterly reports from companies including Tesla and AT&T, while investors sought clarity on the path of interest rates. Asian markets are trading in red on Friday following a lower close on Wall Street, while Japan’s core inflation for March came in at 3.1 per cent, unchanged from February.

Back home, after falling for three straight sessions, Indian equity benchmarks ended flat with positive bias on Thursday as investors remained cautious ahead of key Q4 earnings results of some major companies. After making a cautious start, key gauges traded higher as traders took some support with a private report stating that retail inflation in April will soften with base effect and the inflation print may read a full percentage point lower, after a favourable base effect sharply pulled down Consumer Price Index (CPI) inflation to 5.66 percent in March. Some support also came with a report stating that discussing international developments regarding crypto assets, India and the UK have emphasised the importance of robust global approaches to deal with risks attached to this. At the India-UK 2nd Financial Markets Dialogue participants from both countries provided updates on recent developments in their respective banking sectors, discussing banking trends and emerging vulnerabilities and risks in the sector. However, markets cut initial gains to trade volatile during the trading session. Investors remained cautious amid foreign fund outflows and prevailing risk-off sentiments. Foreign Portfolio Investors (FPIs) offloaded equities worth Rs 13.17 crore on Wednesday, according to exchange data. Some concerns also came with a private report that India's economy is likely to post a resilient 6% growth in FY24, easing slightly from 7% in FY23 because of softer global growth and higher interest rates. But, markets managed to settle with marginal gains helped by fag-end buying in Utilities, Telecom and Power stocks. Finally, the BSE Sensex rose 64.55 points or 0.11% to 59,632.35 and the CNX Nifty was up by 5.70 points or 0.03% to 17,624.45.