Markets likely to get positive start on firm global cues; GDP data eyed

Indian markets gave up all gains on Wednesday and ended flat, dragged by financials. Today, markets likely to get positive start on firm global cues. Traders will be eyeing on the Gross Domestic Product (GDP) data to be out later in the day for more cues. There are expectations that India’s economy grew at its fastest pace in a year in the April-June quarter, driven by services and manufacturing. Some support will come as Finance Minister Nirmala Sitharaman said Indian inflation will remain steady in coming months, despite short-term rises in the prices of certain food items. Traders may take note of a private report that the cut in LPG prices is likely to bring down this financial year's inflation by 10-30 basis points (bps), with a 20-30 basis points decline in September alone. However, there may be some volatility in the markets ahead of monthly F&O expiry later in the day. Some cautiousness may come amid foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 494.68 crore on August 30. Textile industry stocks will be in focus with Crisil’s report that home textile industry's revenues are expected to rise 7-9 per cent this fiscal as the sector regains global share following a correction in domestic cotton prices and restocking by big-box retailers in major overseas markets. There will be some reaction in fertilizer stocks with a private report that fertiliser sales in India are expected to increase during the upcoming rabi season after a spell of insufficient monsoon rain in several parts of the country forced farmers to curb purchases. Steel, pharma stocks will be in limelight as the government is expected to extend export benefits under the RoDTEP scheme to iron and steel, chemicals and pharmaceutical sectors beyond September 30.

The US markets ended higher on Wednesday as fresh economic data signalled a cooling U.S. economy, reinforcing expectations the Federal Reserve will pause rate hikes in September. Asian markets are trading mostly in green on Thursday as investors brace for China’s August factory activity data.

Back home, shedding most of the gains made during the day, Indian equity benchmarks ended flat on Wednesday as investors remained on sidelines ahead of domestic GDP (gross domestic product) data for the April-June quarter, scheduled to be released post-market hours on Thursday. Markets made the gap up opening and stayed in green for better part of the day, as traders took support 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. Sentiments remained up-beat 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 came as BSE data showing that Foreign Portfolio Investors (FPIs) were net buyers, purchasing shares worth Rs 61.51 crore. However, key gauges witnessed profit booking in the last hour. Markets give up all their gains and closed flat. Traders also turned cautious with CARE Ratings’ report stating that 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. Some anxiety also came as rating agency ICRA stating that 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. 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. Finally, the BSE Sensex rose 11.43 points or 0.02% to 65,087.25 and the CNX Nifty was up by 4.80 points or 0.02% to 19,347.45.