Markets likely to make positive start on firm cues from global markets

Indian equity markets ended higher on Friday as credit rating agency Moody's Ratings’ statement that India is expected to remain the region's fastest-growing economy in the Asia-Pacific region in the second half of the year 2024, fuelled by domestic demand growth. Markets were closed on Monday on account of Bakri Id. Today, markets are likely to make positive start amid firm global cues. Traders may get support as President of the Confederation of Indian Industry (CII) stated that within a few years, India will undoubtedly be among the world’s top three economies. Some support may come in as India's foreign exchange reserves jumped $4.307 billion to touch a new lifetime high of $655.817 billion during the week that ended June 7, data from the Reserve Bank of India (RBI) showed. The reserves have been rising on and off for a long time now. So far in 2024, they have risen over $30 billion, on a cumulative basis. Besides, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 2,175.86 crore on June 14. There may be some action in Textile Industry related stocks as the Confederation of Indian Textile Industry (CITI) said that despite unfavourable economic conditions in major markets such as the European Union (EU), the US, and West Asian nations, Indian textile exports grew by 9.59 per cent in May this year compared to same month of the previous year.  There will some buzz in Pharmaceuticals industry related stocks as Union Minister for Health and Family Welfare Jagat Prakash Nadda directed the Department of Pharmaceuticals to upgrade the quality of all drug and medical device manufacturing plants to a world-class standard over the next three years.

On the global front, Asian markets were trading higher in early deals on Tuesday following positive cues from the US markets overnight. The US markets ended higher on Monday amid the New York Fed said its general business conditions index climbed to a negative 6.0 in June from a negative 15.6 in May. 

Back home, Indian equity benchmarks ended higher for a third straight session on Friday driven by index heavyweights Mahindra & Mahindra, Titan Company and HDFC Bank. Markets made a positive start but soon wiped out their gains and entered into red terrain as traders got anxious with data showing that foreign institutional investors (FIIs) were net sellers of stocks worth Rs 3,033 crore on June 13. However, selling proved short-lived as markets quickly rebounded and remained range-bound until the close as traders found solace with credit rating agency Moody's Ratings’ statement that 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 also came as industry body the Confederation of Indian Industry (CII) has 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. Sentiments remained positive in late afternoon deals, taking support from Economic think tank Global Trade Research Initiative’s (GTRI) statement that implementation of key strategic reforms such as simplification of customs duty structure, Goods and Services Tax (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. However, gains remained capped as some pessimism remained among traders with data showing that inflation based on wholesale price index (WPI) accelerated in the month of May 2024 to 2.61% from 1.26% in April 2024, due to increase in prices of food articles, minerals, basic metals, computer, electronic & optical products and electrical equipments. The Component wise, primary articles index, having weight of 22.62%, increased 0.54% to 187.7 (provisional) in May 2024 from 186.7 (provisional) for the month of April 2024, on the back of rise in prices of food articles and minerals. Finally, the BSE Sensex rose 181.87 points or 0.24% to 76,992.77, and the CNX Nifty was up by 66.70 points or 0.29% points to 23,465.60.