Domestic markets likely to make negative start on weak cues from US markets

Indian equity markets ended higher for the third straight session on Friday on account of hectic buying in Maruti Suzuki, Sun Pharma, Titan Company and ITC. Domestic equity markets were closed on Monday on account of Holi. Today, markets are likely to make negative start on weak cues from US markets overnight. Rising crude oil prices likely to put pressure domestic sentiments.  Traders may be cautious as the latest payroll data released by the Employee Provident Fund Organisation (EPFO) said  the formal labour market in January experienced a slowdown as fewer fresh jobs were created during the month. In January 2024, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) declined by nearly 4 per cent to 807,865 from 840,584 in December 2023. Further, foreign fund outflows likely to dampen sentiments in the markets. Provisional data from the NSE showed that foreign institutional investors (FIIs) net sold shares worth Rs 3,309.76 crore on March 22. There may be some cautiousness in the markets as Ministry of Finance has warned the ongoing crisis along the Red Sea shipping route poses a risk to 80 percent of India’s goods trade with Europe and could lead to higher inflation and lower growth in India due to rising transport costs. However, some respite may come in later in the day as the finance ministry said with an uptick in private investment and inflation trending down, India’s outlook for the next fiscal looks positive. It said that inclusion of Indian bonds in Bloomberg bond index from January 2025 should bolster inflows. It said robust investment activity is driving growth amid a steady rise in consumption. Some support may come in as the Reserve Bank said India's forex reserves increased by $6.396 billion to $642.492 billion for the week ended March 15. In the previous reporting week, the overall reserves had risen by $10.47 billion to $636.095 billion. 

The US markets ended lower on Monday as investors gauged the likely path of interest rates from the Federal Reserve ahead of key inflation data due later in this holiday-shortened week. Asian markets are trading mixed in early deals on Tuesday following weak cues from the US markets overnight. 

Back home, Indian equity benchmarks ended higher for the third straight session on Friday, following gains in index majors Maruti Suzuki, Sun Pharma and Titan Company. While most sectors experienced gains, the IT remained in the red due to subdued guidance from Accenture, a major global IT player. Markets opened on weak note as traders were anxious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 1,826.97 crore on March 21. Some concern also came with a private report that private equity and venture capital investments declined to $2.2 billion in February, 39 per cent down when compared with the year-ago period's $3.7 billion.  However, shrugging off early weakness, equity markets rebounded soon and held their gains throughout the day, as traders found solace with Amitabh Kant, former chief executive officer of NITI Aayog and India’s G20 Sherpa stating that India must aim to accelerate its pace of growth to 9-10 per cent over a three-decade period. Kant emphasised India's potential to outpace Japan and Germany, projecting it to become the world's third-largest economy by 2027. Markets added some gains in late afternoon deals, taking support from a survey conducted by industry body FICCI and banking association Indian Banks’ Association (IBA) showing that the health of the Indian banking sector continues to improve with better asset quality and high credit growth. The eighteenth round of the survey was carried out for the period July to December 2023. Additionally, the retreat of crude oil prices from recent highs contributed to the positive sentiment. But, profit taking in the final hour trimmed some gains. Finally, the BSE Sensex rose 190.75 points or 0.26% to 72,831.94 and the CNX Nifty was up by 84.80 points or 0.39% to 22,096.75.