Markets to get flat-to-positive start tracking gains in global markets, foreign fund inflows

Indian markets ended higher on Monday on the back of strong gains in banking stocks. Gains in the markets were also aided by an upbeat in US tech quarter earnings and a drop in US 10-year yield. Today, markets are likely to get flat-to-positive start tracking gains in global markets and on foreign fund inflows. Foreign institutional investors (FIIs) net bought Rs 169.09 crore shares on April 29, provisional data from the NSE showed. Sentiments will get a boost as the National Council of Applied Economic Research (NCAER) in its monthly economic review said that the Indian economy could grow faster than 7% in this financial year. Some support will come with a private report that India's services exports will increase to $800 billion by 2030 from $340 billion in 2023, making the external sector resilient to supply-side shocks and reducing rupee volatility. Traders may take note of report that Finance Minister Nirmala Sitharaman underscored the need for a stable government to achieve the goal of becoming Viksit Bharat by 2047. However, upside likely to remain capped as investors may want to adopt a cautious approach ahead of the key US Fed meet outcome and a trading holiday (Wednesday) in India. There may be some cautiousness as Crisil in its report said that India Inc is likely to log 4-6 per cent revenue growth in the January-March quarter of 2023-24, marking the slowest quarterly growth since recovery from the Covid-19 pandemic which began in September 2021. Traders may be concerned as apex exporters body FIEO said the escalating geopolitical tension may have implications for the country's exports in the first quarter of 2024-25 as it is likely to impact global demand. The global uncertainties caused by continuing war between Russia and Ukraine has impacted India's outbound shipments in 2023-24, which recorded a decline of 3.11 per cent to $437 billion. Imports too dipped by over 8 per cent to $677.24 billion. There will be some reaction in construction sector stocks as rating agency ICRA said India's construction sector entities' revenues are likely to grow by 12-15 per cent in the current financial year, while margins will expand by 25-50 bps. It further said that the government's infrastructure push will result in double-digit revenue growth for the construction industry in FY2025. On the earnings front, Indian Oil Corp, REC, Havells India, Exide Industries, Gravita India, Symphony, Neogen Chemicals, Adani Total Gas, Central Bank of India, and IFCI are among others to report their quarterly results later in the day.

The US markets ended higher on Monday amid suspected intervention as investors embarked on what promises to be an action-packed week. Asian markets are trading in green on Tuesday as investors awaited a slew of economic data, corporate earnings and the US Federal Reserve's policy meeting.

Back home, Indian equity benchmarks resumed northward journey after a day’s break and ended with solid gains with frontline gauges recapturing their crucial 74,600 (Sensex) and 22,600 (Nifty) levels. The markets started on a positive note and extended gains as the day progress amid positive global cues. Sentiments got a boost as economic think-tank National Institute of Public Finance and Policy (NIPFP) said it has estimated India's GDP growth at 7.1 per cent for the current fiscal, using high-frequency models. NIPFP said the Centre is on a fiscal consolidation path through buoyancy in taxes and revenue expenditure compression. Some optimism also came as S&P Global Ratings in the Asia-Pacific 2Q 2024 Banking Update stated that Indian banks' credit growth, profitability and asset quality would remain robust in current fiscal reflecting strong economic growth, but they may be compelled to slow down their loan growth as deposits are not growing at a similar pace. Markets extended gains in late afternoon deals and ended near day’s high, after a private report estimates India's GDP growth at 6.6 per cent in the current fiscal helped by consumption expenditure, exports rebound and capital flows. It said the rapid growth of the middle-income class has led to rising purchasing power and even created demand for premium luxury products and services. Traders got support with a private report stating that intensifying heatwave is unlikely to significantly dent India's growth, even though it could cause some disruption in construction and farm activity. Traders overlooked report that foreign investors pulled out domestic equities worth Rs 6,300 crore in April, (till April 26) on concerns over tweaks in India's tax treaty with Mauritius and sustained rise in US bond yields. Data with the depositories showed this came following a whopping net investment of Rs 35,098 crore in March and Rs 1,539 crore in February. Finally, the BSE Sensex rose 941.12 points or 1.28% to 74,671.28 and the CNX Nifty was up by 223.45 points or 1.00% points to 22,643.40.