Markets likely to make slightly positive start on Thursday

Indian equity markets ended mixed on Wednesday amid volatility. Today, markets are likely to make slightly positive start amid fixed cues from other Asian markets. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 7,908.36 crore on June 19. Traders will be getting encouragement as the Union Cabinet led by Prime Minister Narendra Modi approved minimum support price (MSP) for 14 kharif crops. The government raised MSP for paddy by 5.35 per cent to Rs 2,300 per quintal for the 2024-25 kharif marketing season. Meanwhile, National Stock Exchange Managing Director and CEO Ashishkumar Chauhan said he is confident that India's wealth will increase 1,000 per cent over the next 50 years, thanks to the young population and technological advancements. Traders may take a note of report that RBI in its article on State of the Economy said that retail inflation is gradually easing, but volatile and elevated food prices are interrupting the path of disinflation. It said global growth was resilient in the first quarter of 2024, and many central banks have pivoted towards a less restrictive monetary policy stance in response to the fall in inflation in their economies. However, there may be some cautiousness as the government monetised assets worth Rs 1.56 trillion under the National Monetisation Pipeline (NMP) in 2023-24, lower than the target of Rs 1.8 trillion. Under the NMP, the aggregate monetisation potential of the central government's brownfield infrastructure assets has been estimated at Rs 6 trillion over a four-year period, from FY22 to FY25. Meanwhile, the ministry of labour and employment said that formal job creation under the Employees’ State Insurance Corporation (ESIC) fell by 7.8% to 1.64 million in April 2024 as against 1.78 million in the corresponding month last year. 

On the global front, Asian markets are trading mixed in early deals on Thursday as China kept its one- and five-year loan prime rates unchanged at 3.45% and 3.95% respectively. The US markets were closed on Wednesday on account of Juneteenth. 

Back home, Indian equity benchmarks ended flat on Wednesday after hitting new lifetime peaks during the session, on the emergence of profit-taking amid a lack of immediate triggers. Benchmark indices opened at record highs on firm global cues. Sentiments also got boost with the Central Board of Direct Taxes’ (CBDT) statement that net direct tax collection grew 21 per cent to Rs 4.62 lakh crore so far this fiscal on higher advance tax mop-up. The first instalment of advance tax, which was due on June 15, showed collection rose 27.34 per cent to Rs 1.48 lakh crore. This includes Corporation Income Tax (CIT) at Rs 1.14 lakh crore and Personal Income Tax (PIT) at Rs 34,470 crore. Some support also came as exchange data showed Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth Rs 2,569.40 crore. However, markets shed their early gains and traded lackluster during the day due to the recent slow progress of monsoon. Traders took a note of the Reserve Bank Governor Shaktikanta Das’ statement that India should avoid adventurism and continue to focus on bringing down inflation towards the target of 4% despite the growing clamour to signal a pivot in monetary policy. He stated ‘At this point there is again clamour that one should change the stance. But we want clear evidence that inflation should moderate and perhaps a little faster. It will be too premature to talk in terms of changing the stance’. But, key gauges regained some traction in late hour of trading session but failed to hold momentum and ended flat as investors now looked forward to the Union Budget that is likely to be presented by Finance Minister Nirmala Sitharaman in July.  Meanwhile, the government has released the 17th instalment of about Rs 20,000 crore under PM-KISAN scheme and distributed certificates to over 30,000 self-help groups known as Krishi Sakhis. After depositing Rs 20,000 crore in the accounts of about 9.25 crore farmers, a total of about Rs 3,25,000 crore has been deposited in the accounts of farmers so far. Finally, the BSE Sensex rose 36.45 points or 0.05% to 77,337.59, and the CNX Nifty was down by 41.90 points or 0.18% points to 23,516.00.