Markets likely to get optimistic start on Wall Street gains

Indian markets ended significantly lower on Thursday on persistent FII selling, coupled with nervousness around the Lok Sabha election results amid selling in heavyweights like L&T, HDFC Bank, Reliance Industries. Today, markets are likely to get optimistic start on the back of Wall Street gains and positive sentiment across global markets. Sentiments will get a boost as the Export-Import Bank of India forecast India’s merchandise exports to grow 12.3% on-year at $116.7 billion in the April-June quarter of FY25, on strong economic fundamentals and sustained manufacturing and services activity. Besides, a recent report by the Ministry of Commerce said India's exports have surged to as many as 115 countries out of the total 238 destinations during 2023-24 despite the global economic uncertainties. Some support will come with a private report that India’s retail market is poised to surpass $2.2 trillion by 2030, with approximately 90 per cent of sales expected to occur offline. The report also finds that a substantial portion of all purchases will be influenced by what consumers see online. However, some cautiousness may come amid foreign fund outflows. Foreign institutional investors (FIIs) offloaded shares worth Rs 6,994.86 crore on May 9. Traders may be concerned with report that as India's general election reaches halfway, declining voter turnout sparks concerns about disengagement in the world's largest poll. The decrease raises questions about the ruling Bharatiya Janata Party's support, causing uncertainty in financial markets. Tyre industry stocks will be in focus as ratings agency Icra said domestic tyre sale volumes are expected to see a moderate growth of 4-6 per cent this fiscal after witnessing an estimated pace of 6-8 per cent in the previous financial year. It added this growth in the last fiscal was driven by factors such as elevated base and subdued growth in the commercial vehicle (CV) segment. There will be some reaction in cement industry stocks with a private report that the cement sector in the current financial year (2024-25/FY25) could see stable prices and lower costs. It said going forward, there might be some moderation in FY25 in terms of demand. Moreover, Investors will await key earnings reports, including those of Cipla, Eicher Motors, Tata Motors, and Bank of Baroda among others.

The US markets ended in green on Thursday, with the S&P 500 hitting a one-month high, as US jobless claims rose, fueling speculation of Fed rate cuts. Asian markets are trading mostly higher on Friday led by Japan after Japan's consumer spending data, which surpassed expectations, provided support to market sentiment in the region.

Back home, Indian equity benchmarks ended with heavy losses of around one and half percent on Thursday, with Sensex and Nifty closing below their crucial psychological levels of 72,450 and 22,000, respectively. Selling pressure from foreign investors, coupled with uncertainty around the country's ongoing elections have kept investors jittery. According to the provisional data available on the NSE, Foreign institutional investors (FII) offloaded shares worth net Rs 6,669.10 crore on Wednesday. Markets made cautious start and stayed under pressure throughout the day, as traders remain concerned with a private report stating that India's consumer price inflation is likely to have eased to 4.80% in April, just shy of March's rate as food inflation remains sticky. As per the report, with parts of the country experiencing a heatwave, food prices continue to pose an additional risk to India's inflation trajectory. Markets saw further fall in the second half of the trade and ended near their intraday low points, as domestic sentiments got hit after the Reserve Bank of India (RBI) in its latest data report showed that India’s outward foreign direct investment (OFDI) commitments declined 18.29% to $2943.98 million in April 2024 as compared to $3602.95 million in April 2023. In March 2024, it stood at $3,963.94 million. Traders also failed to draw any sense of relief from Chief Economic Adviser V Anantha Nageswaran’s statement that there was a high possibility of GDP growth touching 8 per cent in FY24 on the back of robust growth registered during the three quarters of the financial year ended March 2024. India’s gross domestic product (GDP) grew by 8.4 per cent in the third quarter ended December 2023. Finally, the BSE Sensex fell 1062.22 points or 1.45% to 72,404.17, and the CNX Nifty was down by 345.00 points or 1.55% points to 21,957.50.