Markets likely to get optimistic start following inflation data

Indian markets ended higher with marginal gains on Tuesday led by gains in index heavyweights - HDFC Bank, TCS and Reliance Industries. Today, markets are likely to get an optimistic start tracking broadly positive cues from global markets. Also, in line with street estimate, India’s inflation data likely to aid domestic sentiments. Retail inflation in February eased to a four-month low of 5.09 per cent, remaining within the Reserve Bank's comfort zone of 6 per cent for the sixth month in a row, showed a government data. The February inflation print based on Consumer Price Index (CPI) was almost unchanged compared to the January number of 5.1 per cent, though prices of certain items in the food basket firmed up. Foreign fund inflows likely to support markets. Foreign institutional investors (FIIs) net bought shares worth Rs 73.12 crore on March 12, provisional data from the NSE showed. However, fall in industrial growth data likely to dampen sentiments in the markets. India's industrial production growth slowed to 3.8 per cent in January, according to the latest government data. Growth in factory output, based on the Index of Industrial Production (IIP), slowed mainly due to poor performance of manufacturing, mining and power sectors. There may be some cautiousness as a report of economic think tank GTRI stated that with escalating everyday attacks and no end in sight, the Red Sea crisis will adversely impact trade volumes in substantial ways in 2024. The Global Trade Research Initiative (GTRI) said that rising shipping, and insurance costs and delayed arrival of shipments will continue to disrupt global value chains, squeeze margins, and make exports of many low-margin products unviable from current locations. There will be some buzz in the automobile industry stocks with the data released by the Society of Indian Automobile Manufacturers (Siam) showing that passenger vehicles in India recorded their highest-ever February domestic sales of 370,786 units this year, 10.8 per cent higher than 334,790 units in February last year. As per the data, two-wheelers and three-wheelers also witnessed higher sales in February this year as compared to the last year. Pharma stocks will be in focus after the Department of Pharmaceuticals notified a new code which prohibits pharma companies from offering gifts and travel facilities to healthcare professionals or their family members. Meanwhile, JG Chemicals will make debut on the exchanges against the issue price is Rs 221.

The US markets ended higher on Tuesday with the S&P 500 registering a record high close as Oracle shares surged and consumer price data failed to dampen investors' hopes of interest rate cuts in the coming months. Asian markets are trading mostly in green on Wednesday after Wall Street jumped overnight, following US inflation data that largely met expectations.

Back home, Indian equity benchmarks experienced a volatile trading session with an ongoing battle between the bulls and bears but managed to eke out marginal gains on Tuesday.  After making a slightly positive start, markets added gains amid foreign fund inflows. Foreign institutional investors (FIIs) net bought shares worth Rs 4,212.76 crore on March 11, provisional data from the NSE showed. Sentiments got a boost as a report by India Ratings and Research said India will join the coveted club of upper-middle income countries by FY36. The ratings agency’s report estimated that by FY47, it will become a $15 trillion economy. Some support also came as Commerce and Industry minister Piyush Goyal has exuded confidence that during this fiscal, the country's goods and services export numbers will be at the same level; as it was last year despite slowdown and uncertainties in the global trade. He also said that the government measures such production-linked incentives schemes and focus on high-quality goods and services would help in containing the country's trade deficit. But, markets were volatile during the day but managed to keep their heads above water for the most part of the session. Traders took a note of CEO of Crisil Amish Mehta’s statement that the Indian economy is expected to show resilience on the back of sustained domestic demand and consumption. He added that the agency expects GDP growth in the upcoming fiscal to moderate to 6.8 per cent.  Finally, markets ended flat, as investors remained on sidelines ahead of the India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out later in the day. Finally, the BSE Sensex rose 165.32 points or 0.22% to 73,667.96 and the CNX Nifty was up by 3.05 points or 0.01% to 22,335.70.