Benchmark indices likely to open in green following broadly positive cues from global markets

Indian markets ended flat on Friday after the Reserve Bank of India kept repo rate unchanged at 6.5 per cent for a seventh straight policy. Today, benchmark indices are likely to open in green following broadly positive cues from global markets. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 1,659.27 crore on April 5, provisional data from the NSE showed. Traders will be taking encouragement as a recent bi-monthly survey conducted by the Reserve Bank of India (RBI) from March 2 to March 11, 2024 showed that consumer confidence in India has soared to its highest level since mid-2019. The survey, which included 6,083 respondents, with females comprising 50.8 percent of the sample, revealed a significant uptick in consumer sentiment. Some support will also come as a latest data by the Reserve Bank of India (RBI) showed that India’s foreign exchange reserves rose to a new high for the third straight week, reaching $645.58 billion in the week ended March 29. The total reserves rose by $2.95 billion in the previous week. Besides, India Ratings and Research (Ind-Ra) has put out a report maintaining a neutral outlook on the finances of Indian states for the fiscal year 2024-2025 (FY25), showing States' aggregate revenue deficit is projected to be 0.4 per cent of gross domestic product (GDP) for FY25, down from 0.5 per cent in FY24. Banking stocks will be in focus as the Reserve Bank of India's weekly statistical supplement showed that Indian banks' loans rose 20.2% in the two weeks to March 22 from a year earlier, while deposits rose 13.5%. Outstanding loans rose Rs 1.21 trillion ($14.54 billion) to Rs 164.35 trillion in the two weeks to March 22. There will be some reaction in aviation industry stocks with a private report that the average daily international traffic to and from India decreased by 4.81 per cent month-on-month (M-o-M) to 196,050 in March as inbound tourism gradually receded with the onset of the summer season. Automobile industry stocks will be in limelight with a private report that electric-vehicle sales in India are expected to rise 66% this year after nearly doubling in 2023 as state subsidies help fuel demand and supporting infrastructure comes up in the country. The rapid growth in sales comes at a time when EV growth in other key markets such as the United States and China are slowing. There will be some reaction in Healthcare related stocks as Manipal Health Enterprises nears Rs 1,400 crore deal to acquire Medica. Post-acquisition, Manipal will become India’s largest hospital chain with over 10,700 beds overtaking Apollo Hospitals in the process.

The US markets ended in green on Friday after a strong jobs report reinforced the view that the economy remains healthy even as it suggested the Federal Reserve could delay cutting interest rates. Asian markets are trading mostly in green on Monday ahead of central bank decisions this week, with investors also awaiting inflation numbers from the US and China.

Back home, Indian equity benchmarks ended flat in a volatile session on Friday amid a negative trend in global markets. Markets made a cautious start and traded range bound throughout the session as six-member rate-setting panel of the Reserve Bank of India (RBI) kept the benchmark interest rates unchanged at 6.5 per cent for the seventh time in a row. It also expressed concerns over food inflation given IMD's prediction of above-normal maximum temperatures during April-June. The RBI also retained GDP growth forecast of 7% for 2024-25 financial year, with June quarter growth at 7%, and September quarter at 6.9%. In the third and fourth quarter the growth is expected to be 7% each. This is lower than the 7.6% expansion estimated for FY24. Markets continued their lackluster trade in late afternoon deals, as provisional data from the NSE showed foreign institutional investors (FIIs) net sold shares worth Rs 1,136.47 crore on April 4, 2024. Some cautiousness also came with ICRA’s report that growth of the Indian Securitisation market is set to slow this fiscal year keeping the trend witnessed in the last quarter of fiscal 2024 as non-banking finance companies and banks get into co-lending reducing the demand for such papers. However, markets managed to erase all the losses to end flat as traders found support with the United Nations stating that India has become the world’s fastest-growing major economy and a bright spot for the Asia-Pacific in 2023 amid strong household consumption and public investment in infrastructure. Some support also came with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the consumption is likely to support economic growth in 2024-25, adding that urban consumption stayed buoyant. He said the resilience in cement production, together with strong growth in steel consumption and production and import of capital goods, augur well for the investment cycle to gain further traction. Finally, the BSE Sensex rose 20.59 points or 0.03% to 74,248.22 and the CNX Nifty was down by 0.95 points to 22,513.70.