Markets likely to make positive start on firm global markets

Indian equity markets ended higher on Thursday with Nifty and Sensex settling above the psychological 24,000 and 79,200 levels respectively. Today, markets are likely to make positive start on firm cues from the global markets. Traders will be getting support as the Reserve Bank in its Financial Stability Report (FSR) said the decline in bad assets of banks to a 12-year low of 2.8 per cent and strong GDP numbers will help in sustaining the growth momentum and withstanding global shocks. It stated the real gross domestic product (GDP) rose by 8.2 per cent in 2023-24 against 7 per cent in the preceding fiscal, despite muted private and government consumption and external demand conditions acting as a drag. Besides, it said that the projection of an above-normal southwest monsoon in 2024 augurs well for the upcoming kharif season and can ease pressures on food prices. It said that inflation is showing signs of moderation, albeit unevenly, while fiscal consolidation progresses. Traders may take note of report that Commerce and Industry Minister Piyush Goyal held meetings with export promotion councils as well as industry associations to discuss strategies to enhance global market outreach, further boost India's exports by focusing on key sectors, and addressing trade barriers. Besides, with the need to fund short-term foreign exchange liquidity requirements or balance of payment crises, the Reserve Bank of India released the revised framework on currency swap arrangements with South Asian Association for Regional Cooperation (SAARC) countries for the period between 2024 to 2027. Additionally, the government launched an initiative to facilitate onboarding of 5,00,000 micro and small enterprises on the Open Network for Digital Commerce (ONDC) platform. Meanwhile, the inclusion of India's government bonds into JPMorgan Chase & Co. emerging markets index from today is expected to open up a $1.3 trillion market to a broader range of investors.

On the global markets, Asian markets are trading higher in early deals on Friday amid investors assessed key economic data out of Japan and awaited U.S. inflation readings due later in the day. The US markets ended marginally higher amid investors awaited fresh inflation data. 

Back home, Indian equity benchmarks continued their record-breaking spree on Thursday, with Sensex breaching the historic 79,000 mark while Nifty scaling the historic 24,000 peak for the first time. Buying in blue-chip stocks like Ultratech Cement, NTPC and JSW Steel helped the markets extend gains for fourth consecutive day and closed at all-time highs. Markets made a cautious start amid foreign fund outflows. Foreign institutional investors (FIIs) offloaded shares worth Rs 3,535.43 crore on June 26. However, markets gained momentum as the day progressed as traders took support with the National Council of Applied Economic Research (NCAER) stating that India's economy is set to achieve significant growth, with projections nearing 7.5% for the current fiscal year (FY25). Some solace also came with CRISIL’s report stating that India’s current account surplus in the fourth quarter of the 2023-24 fiscal was aided by narrowing of the merchandise trade deficit, an increase in remittances and a surplus in services trade. The country’s current account recorded a surplus of $5.7 billion, which is 0.6 per cent of the GDP, in the fourth quarter of the last financial year. Key gauges extended gains in final minutes of trade, taking support from report that president Droupadi Murmu during the joint session of the Parliament said that the BJP-led NDA government has given importance to all the three pillars of the economy -- Manufacturing, Agriculture and Services. She said that India is emerging as a leader in every sector from IT to tourism and from health to wellness. Traders took a note of the World Bank’s report stating that India received $120 billion in remittances in 2023, which is almost twice as $66 billion received by Mexico during the same period. It said remittances to India are forecast to grow at 3.7 per cent to $124 billion in 2024, and at 4 per cent to reach $129 billion in 2025. It noted that India’s efforts to link its Unified Payments Interface with source countries such as the United Arab Emirates and Singapore are expected to reduce costs and speed up remittances. Finally, the BSE Sensex rose 568.93 points or 0.72% to 79,243.18, and the CNX Nifty was up by 175.70 points or 0.74% points to 24,044.50.