Markets likely to make positive start on firm cues from global markets

The domestic equity market staged a recovery from day’s low and ended higher on Wednesday, buoyed by renewed buying interest in banking stocks. Today, markets are likely to make positive start amid firm global cues. Falling crude oil prices and U.S. Treasury yields are likely to support domestic sentiments.  Traders may get some encouragement as the Reserve Bank of India (RBI) data stated India’s services trade surplus shot up to a record $44.9 billion in the October-December quarter (third quarter, or Q3) of 2023-24 (FY24), growing 16 per cent year-on-year, showing resilience amid strong global headwinds. This is likely to reduce the current account deficit (CAD) in Q3. Meanwhile, Finance Minister Nirmala Sitharaman is scheduled to review the state of the economy amid global challenges at a meeting of the Financial Stability and Development Council (FSDC) on February 21. This would be the first meeting of the FSDC after the passage of the Rs 47.6 lakh crore Budget for 2024-25, focussing on capital expenditure with an outlay of Rs 11.11 lakh crore. There may be some buzz in steel industry related stocks as the government said Selected companies have invested about Rs 12,900 crore in the domestic steel sector under the production-linked incentive (PLI) scheme for specialty steel till December and another Rs 3,000 crore is expected during the current financial year (FY24). There will be some buzz in Defence industry related stocks as procurement of goods and services by the Ministry of Defence (MoD) through public buying platform GeM has crossed Rs 1 lakh crore, with about half of it coming in the current financial year. The Government e-Market (GeM) portal was launched on August 9, 2016, for online purchases of goods and services by all central government ministries and departments. 

Asian markets are trading mostly in green in early deals on Thursday, following positive cues from the US markets, even as GDP numbers from Japan showed that Asia’s second-largest economy had entered a technical recession. The US markets ended higher on Wednesday as a buying opportunity amid ongoing optimism about the outlook for the markets. 

Back home, Indian equity indices staged a recovery from day’s lows and ended with gains, buoyed by renewed buying interest in Oil & Gas, Energy and Metal stocks. Markets opened in the deep red, tracking negative cues in the global market as higher than expected inflation numbers in the U.S. hit investor sentiments. Traders took a note of Former Reserve Bank Governor C Rangarajan’s statement that India needs to grow at seven to eight per cent annually in order to become a developed nation with $13000 per capita income by 2047. Asserting that innovation cannot be a single solution to reduce inequalities or poverty, he said besides faster growth rate, the country may need social safety nets such as subsidies in kind of cash and basic income. However, bulls rushed in to support the indices in late afternoon deals and helped to close with gains amid easing WPI inflation. Inflation based on wholesale price index (WPI) eased in the month of January 2024 to 0.27% from a nine-month high of 0.73% in December 2023, amid lower prices of crude petroleum & natural gas, non-food articles and food articles. The Component wise, primary articles index, declined 1.04% to 181.0 (provisional) in January 2024 from 182.9 (provisional) for the month of December 2023. Some support also came as Prime Minister Narendra Modi asserted that the country will emerge as the third largest economy in the world in coming years. Besides, foreign fund inflows aided sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 376.32 crore on February 13, provisional data from the NSE showed. Finally, the BSE Sensex rose 267.64 points or 0.37% to 71,822.83 and the CNX Nifty was up by 96.80 points or 0.45% to 21,840.05.