Markets likely to get cautious start amid lackluster global cues

Indian markets after two days of selling bounced back on Thursday and ended with gains of over half a percent amid buying across the sectors and broader indices. Today, start of the session is likely to be cautious amid lackluster global cues. Investors will be eyeing Services PMI data to be out later in the day for more directional cues. However, some respite will come later in the day amid overnight fall in crude oil prices and foreign fund inflows. Provisional data from the NSE showed foreign institutional investors (FIIs) bought shares worth Rs 1,513.41 crore on January 4. Some support will come with a private report that India is likely to project higher economic growth estimates of around 7% for the 2023/24 fiscal year ending in March, compared with earlier government forecasts when the National Statistical Office releases its first advance GDP estimates on Friday. Moreover, in a boost to the ethanol blending programme which has been strutting following the decision to stop production from sugarcane juice, the oil marketing companies (OMCs) announced a Rs 5.79 per litre increase to Rs 71.86 a litre in procurement price of ethanol produced from maize for the 2023-24 supply year that started in November. Pharma stocks will be in focus as credit rating agency ICRA expects the revenues of a sample set of 25 Indian pharmaceutical companies which account for 60% of the overall revenues of the Indian pharmaceutical industry to expand by 9-11% in FY24, compared to 10% over previous year. There will be some reaction in aviation industry stocks as the Directorate General of Civil Aviation (DGCA) said domestic airlines inducted a total of 133 planes in 2023, which is 51 per cent higher on an annual basis, as they continued to expand their networks to meet rising passenger demand. Of the 133 aircraft, 21 were taken by the carriers on wet lease. Telecom stocks will be in limelight as latest data from the Telecom Regulatory Authority of India (Trai) showed that Reliance Jio continued to strengthen its position in the Indian telecom market, gaining 3.15 million new users in October. Vodafone Idea (Vi) saw 2.04 million users leave their service, while Bharti Airtel saw its subscriber count increase by 0.35 million.

The US markets ended mostly in red on Thursday ahead of a key jobs report with Wall Street trying to shake off a sluggish start in January. Asian markets are trading mostly in green on Friday as investors will be watching Southeast Asia’s economic data due later in the day.

Back home, taking a breather after two days of decline, Indian equity benchmarks rebounded swiftly and gained over half a percent on Thursday, supported by strong gains across Realty, Utilities and Telecom stocks. Markets made a gap up opening and inched gradually higher as the day progressed, as traders took encouragement after India Ratings and Research upped India’s GDP growth estimate for current fiscal to 6.7 per cent, from 6.2 per cent, citing resilient economy, sustained government capex and prospect of a new private corporate capex cycle. Some optimism also came with Fitch Ratings’ report stating that the economic growth in Asia Pacific will remain strong in 2024 and GDP is expected to grow by about 5 per cent in India and a host of emerging market countries. It also said the outlooks for the banking sectors in India and Indonesia, as well as APAC emerging markets as a whole, move to improving in 2024, partly reflecting the robust economic backdrop. Markets continued their upward trajectory in late afternoon deals, taking support with Commerce and Industry Minister Piyush Goyal exuding confidence that during this fiscal (FY24), the country will maintain the last year's export figures despite slowdown in global trade. He said that India's exports of goods and services rose to $776 billion in 2022-23 from $500 billion two years ago. Some support also came with External Affairs Minister S Jaishankar’s statement that the year 2024 will continue to be turbulent for the world but India is well-positioned politically and economically to navigate the challenges, maintain its rising global role and its path of development. Some comfort also came as private report said that rural demand is likely to pick up pace in 2024 owing to moderation in inflation, replenishment of rural savings after the Covid pandemic, increased liquidity on the back of pre-election spending, and a likely stable regime. Finally, the BSE Sensex rose 490.97 points or 0.69% to 71,847.57 and the CNX Nifty was up by 141.25 points or 0.66% to 21,658.60.