Markets likely to get cautious start amid mixed global cues

Indian markets ended slightly higher on Thursday, after hitting record highs earlier in the session. Today, markets are likely to get cautious start amid mixed global cues. Market may witness some profit-taking owing to the extended weekend factor. Equity market will be closed for trading on Monday on account of Bakri Id holiday. Foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) were net sellers of stocks worth Rs 3,033 crore on June 13. However, credit rating agency Moody's Ratings said fuelled by domestic demand growth, India is expected to remain the region's fastest-growing economy in the Asia-Pacific region in the second half of the year 2024. The report also noted that India, Indonesia, and the Philippines were the key growth outperformers in the first half of the year 2024. Some support will come as industry body CII made a case for pushing reforms in sectors like land, labour, and agriculture by the Modi 3.0 government to accelerate economic growth, which is estimated to be around 8 per cent in the current financial year. CII President Sanjiv Puri said a lot of policy interventions in the past have put the economy on a much stronger wicket. Economic think tank Global Trade Research Initiative (GTRI) said implementation of key strategic reforms such as simplification of customs duty structure, GST, and not incentivising low value-added electric vehicles would help India ensure its sustainable development and inclusive growth. It also said that India is standing on the cusp of a transformative era and there is an urgent need for comprehensive economic reforms. Traders may take note of a private report that fiscal deficit of the 20 largest states is expected to be 2.8 per cent of gross domestic product (GDP) in FY25 compared to the budgeted 3.2 per cent of GDP, as expenditure growth is expected to moderate during the year. Edible oil industry stocks will be in focus with report that the imports of edible oils – palm, soybean and sunflower - declined by 5% to 8.67 million tonne (MT) in first seven months of the 2023-24 oil year (November-October) compared to the same period last oil year. There will be some reaction in gaming industry stocks as the Goods and Services Tax (GST) Council is likely to consider a review of 28% tax on online gaming and clarification on several procedural matters at its next meeting on June 22 in the national capital. Investors will be eyeing WPI data to be out later in the day.

The US markets ended mostly higher on Thursday driven by a continued rally in technology shares. Asian markets are trading mixed on Friday ahead of the Bank of Japan’s rate cut decision that is due today.

Back home, Indian equity benchmarks ended Thursday’s trading session on a positive note, backed by gains in Realty, Capital Goods and Consumer Durables stocks. After an initial gap-up, the markets wiped off some of their gains in the opening trade itself amid slight fall in industrial growth. The Index of Industrial Production (IIP) moderated to 5 per cent in April from an upwardly revised figure of 5.4 per cent in the preceding month. However, key gauges managed to trade in green throughout the day as government data showed Retail inflation continued its downward slide to reach a one-year low of 4.75 per cent in May due to a marginal decline of prices in the food basket and remained within the Reserve Bank’s comfort zone of below 6 per cent. Besides, foreign fund inflows also aided domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 426.63 crore on June 12. Markets maintained their gains in second half of trading session, taking support from ICRA Executive Vice President and Chief Ratings Officer K Ravichandran’ statement that the PLI scheme is expected to attract investments of Rs 3-4 trillion in the next four years and generate 200,000 jobs as large projects in sectors, including semiconductor, solar module and pharmaceutical intermediaries, are expected to take off. He said that going ahead private sector capex is expected to pick up in oil and gas, metals and mining, hospitals, healthcare and cement sectors. Sentiments remained optimistic as the Reserve Bank of India (RBI) in its latest data report on ‘Overseas Direct Investment’ has showed that the country's outward foreign direct investment (OFDI) commitments increased 1.04% at $2009.51 million in May 2024 as compared to $1988.8 million in May 2023. These OFDI commitments were $2782.61 million in the month of April 2024. According to the report, the equity commitments rose 6.51% to $1028.76 million in May 2024 from $965.86 million a year ago. Finally, the BSE Sensex rose 204.33 points or 0.27% to 76,810.90, and the CNX Nifty was up by 75.95 points or 0.33% points to 23,398.90.