Markets likely to get negative start tracking weakness in global peers

Indian markets ended on a positive note in a volatile session on Tuesday, supported by power, PSU bank and oil and gas names. Today, markets are likely to get negative start tracking weakness in global peers. Investors are highly nervous as they await the release of US GDP and PCE inflation data, which will guide the upcoming Fed action. There will be some cautiousness as the finance ministry in its Monthly Economic Review for March said that India’s economy continues to be robust, but downside risks such as rising crude oil prices, adverse weather conditions, and the global banking crisis outweigh the upside potential in gross domestic product (GDP) growth in the current financial year (FY24). The review said ‘we reiterate that downside risks to our official forecast of 6.5 per cent for real GDP growth in FY24 dominate upside risks’. Traders will be concerned amid foreign fund outflows. according to provisional data from National Stock Exchange, foreign institutional investors (FII) sold shares worth Rs 407.35 crore on April 25. Meanwhile, the Securities and Exchange Board of India (SEBI) has put a stop to the practice of brokers creating bank guarantees using client funds. It said that such practices will be barred from May 1 and all existing bank guarantees have to be terminated by September 30. Banking stocks will be in focus as the Finance Ministry in its monthly economic review said that India’s banking system is ‘strong enough to survive’ stress caused by interest rates increasing and it will continue aiding economic growth. There will be some reaction in tea industry stocks as leading planters' body, Indian Tea Association (ITA), is making a fresh pitch for a floor price for tea in the wake of an adverse impact of unfavourable weather conditions on the crop and stagnating auction prices. The earnings momentum is likely to continue with Maruti Suzuki, SBI Life, Bajaj Finance and among other companies to release their fourth quarter earnings of the previous fiscal later in the day.

The US markets ended lower on Tuesday after regional bank - First Republic Bank's earnings report triggered fears about the broader sector. Asian markets are trading mixed on Wednesday following overnight losses on Wall Street.

Back home, Indian equity benchmarks erased most of their initial gains but managed to end in green for the second straight session on Tuesday, helped by buying in power and utility stocks amid positive quarterly numbers announced by heavyweight companies.  The domestic indices made a cautious start as foreign fund outflows and a muted trend in global equities dented sentiments. According to provisional data from National Stock Exchange, foreign institutional investors (FII) sold shares worth Rs 412.27 crore on April 24. However, markets soon gained some traction as the National Council of Applied Economic Research (NCAER) said that after weakening for three consecutive quarters, business sentiment turned buoyant in the fourth quarter (Q4) of the fiscal year ended March 31 (FY23). The Business Confidence Index (BCI) stood at 149.7 in Q4, up from 126.6 in Q3 FY23. Markets extended their gains in late afternoon session, as traders took support with Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy’s statement that some states in India are already in the high-income category in purchasing power parity (PPP) terms, and the country is likely to move to the upper-middle-income country by 2047. Debroy further said any presumption that the Indian economic growth rate will be driven only by exports may be misleading because there are plenty of endogenous sources of growth. But, markets cut some gains in final minutes of trade as traders got anxious with a private report stating that the credit growth momentum is waning in the country and the crucial non-food loans growth is expected to slip to 10 per cent in FY24 from more than 15 per cent in FY23. Traders also got cautious after a senior United Nations (UN) official said that India is projected to overtake China as the world's most populous country by the end of this month when its population is expected to reach 1.425 billion. Finally, the BSE Sensex rose 74.61 points or 0.12% to 60,130.71 and the CNX Nifty was up by 25.85 points or 0.15% to 17,769.25.