Markets likely to get gap-down opening on weak global cues

Indian markets ended higher with notable gains on Thursday led by gains in index heavyweights Bharti Airtel, Larsen & Toubro and IT shares. Today, markets are likely to get gap-down opening on weak global cues due to a more-than-expected increase in US wholesale inflation. The US producer price index rose 0.6 per cent against expectations of a 0.3 per cent rise, sending the US-10-year treasury yield higher by 10 bps to 4.29 per cent. Foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 1,356.29 crore on March 14, provisional data from the NSE showed. However, some support may come later in the day as the Confederation of Indian Industry (CII) said in a report Indian startups are likely to create 50 million new jobs and add $1 trillion to the economy by 2029-30 (FY30). The report, titled ‘Unicorn 2.0: Adding the Next Trillion’, also said that the size of the Indian economy was likely to be $7 trillion by 2030. Traders may take note of a private report that investments in India are set to grow faster than consumption for the next few years, and it see Gross Fixed Capital Formation (GFCF) rising to 36 percent of GDP in 2026-27. Meanwhile, the commerce ministry is in discussions with the Reserve Bank of India (RBI) to facilitate e-commerce exports by liberalising the Foreign Exchange Management Act (FEMA) guidelines. Oil marketing companies like BPCL, HPCL and Indian Oil will be in focus the Centre has reduced prices of petrol and diesel by Rs 2 per litre, effective from March 15. The move comes at a time when Brent crude oil is hovering above $85 per barrel. There will be some reaction in infrastructure stocks as data by the ministry of road transport and highways shows that with a month from the close of the financial year, construction of national highways (NH) in the country in FY24 has been nearly 13 per cent higher than the last financial year at 9,088 kilometres (km). Insurance industry stocks will be in limelight with report that the non-life insurance industry, including general, standalone health and specialised PSU insurance companies, have witnessed a 13.1 per cent growth in premiums to Rs 2.63 trillion in the first 11 months of FY24, up from Rs 2.32 trillion in the year-ago period. The growth was backed by the rise in health and motor insurance premiums.

The US markets ended lower on Thursday with chipmaker stocks extending losses for a second day, and as a jump in producer prices left investors wondering if the Federal Reserve might wait longer than expected to cut interest rates. Asian markets are trading in red on Friday as investors in Asia will be watching out for any news from Japan’s spring wage negotiations, with first estimates expected to come out later in the day.

Back home, Indian equity benchmarks rebounded sharply on Thursday after the steep sell-off in the previous trading session, led by gains in index heavyweights HCL Technologies, Wipro and Infosys. Markets made a negative start amid weekly expiry of the F&O contracts. Some concern also came with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 4,595.06 crore on March 13, 2024. However, key indices soon wiped off early losses and inched gradually higher as traders took some support with report that NITI Aayog has proposed a series of measures to boost exports from micro, small and medium enterprises, including boosting e-commerce exports, creating a comprehensive trade portal, promoting ease of merchandise exports, improving access to export finance and creation of one stop information channel for exporters. Markets extended gains in afternoon deals, as sentiments got boost after global ratings agency Fitch Ratings raised India's FY25 GDP growth forecast to 7 percent from 6.5 percent earlier as it expects the economy to continue its strong expansion. Fitch expects 50 bps rate cut by the Reserve Bank of India from July to December and foresees India's CPI inflation gradually declining to 4 percent by the end of 2024. Some support also came as inflation based on wholesale price index (WPI) eased in the month of February 2024 to 0.20% from 0.27% in January, aided by decline in prices of non-food articles, coal, basic metals, other non-metallic mineral products, fabricated metal products (except machinery & equipment), rubber & plastic products and printing & reproduction of recorded media etc. But, markets trimmed some gains in late afternoon deals as some pessimism remained among traders with Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that he is “worried” over retail investors’ play in risky Futures and Options (F&O) segment in search of instant profits. He said the biggest threat to sustainable capital formation and also sustainable economic growth is the “short-termism” in attitudes that the country is afflicted with. Finally, the BSE Sensex rose 335.39 points or 0.46% to 73,097.28 and the CNX Nifty was up by 148.95 points or 0.68% to 22,146.65.