Benchmarks to make optimistic start on firm trade across global markets

Indian markets eked out marginal gains and ended higher on Tuesday for second straight session as metal and power and select financial shares advanced. Today, start of the session is likely to be optimistic following firm trade across global markets. Traders will be getting encouragement as RBI data showed that interrupting a two-month streak of decline, outward foreign direct investment (FDI) rose sequentially to $1.85 billion in July over $1.07 billion in June, an increase of 73 per cent. Some support will come with report that the Centre is likely to infuse capital in certain regional rural banks (RRBs) during 2023-24, depending on their performance and adoption of digitisation. Union Finance Minister Nirmala Sitharaman will hold a review meeting with chairpersons and senior officials of RRBs from the Northern region in New Delhi. Traders may take note of report that in a significant move, the Union Cabinet has given the green light to the National Policy on Research and Development and Innovation in the Pharma-MedTech Sector. This decision is accompanied by the approval of the Scheme for Promotion of Research and Innovation in Pharma-MedTech Sector (PRIP), with a substantial allocation of Rs 5,000 crore for a five-year period spanning from FY24 to FY28. Besides, the Union government said that the price of domestic LPG cylinders has been cut by Rs 200 for all connections, in all markets across the country. This decision comes amid high inflation and ahead of crucial state and general elections. India has a total of 314 million domestic LPG consumers. However, some cautiousness may come as CARE Ratings said the erratic monsoon, which is affecting sowing, and global developments will keep the food inflation at elevated levels and would also hit the demand in rural India owing to lower income and inflation. Meanwhile, the Securities and Exchange Board of India (Sebi) has proposed to halve the issue size for tapping social stock exchanges (SSEs) and bring down the minimum application amount from Rs 2 lakh to Rs 10,000. IT stocks will be in focus as rating agency ICRA said the information technology (IT) services industry’s revenue growth will likely slow down to 3-5 per cent in this financial year (FY24) due to persistent macroeconomic uncertainty and weak demand in the US and Europe. There will be some reaction in auto stocks as Union Heavy Industries Minister Mahendra Nath Pandey said the government has decided to extend the Rs 25,938-crore production-linked incentive scheme for the automotive sector by one year.

The US markets ended higher on Tuesday supported by record rally in Nvidia shares on Google partnership. Asian markets are trading in green on Wednesday tracking overnight gains on Wall Street.