Markets likely to extend previous sessions gains with positive start

Indian markets scaled fresh record highs on Wednesday, in the intraday trade, as financial heavyweights such as HDFC Bank, Axis Bank, Kotak Bank, and State Bank of India marched ahead. Today, markets are likely to extend previous sessions gains with positive start tracking firm cues from global peers. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) were net buyers of worth Rs 5,484 crore on Wednesday. Traders will be taking encouragement as a CRISIL Ratings report said that revenues of top 18 states, which account for 90 per cent of India's gross state domestic product, are likely to grow at a pace of eight to 10 per cent during the current financial year at Rs 38 lakh crore.  The growth will be primarily driven by robust GST collections and devolution of finances from the Centre, which comprise around 50 per cent of the aggregate state revenues. Some support will come as a research paper by the economic think tank NCAER stated that poverty in India is estimated to have declined to 8.5 per cent in 2022-24 from 21.2 per cent in 2011-12, despite the challenges posed by the pandemic. Traders may take note of report that S&P Global Ratings said a sovereign rating upgrade for India in the next 24 months is possible if the central government is able to prudently manage its finances and bring down fiscal deficit to 4 per cent of GDP. S&P Global Ratings Director, Sovereign Ratings, YeeFarn Phua, said the trigger for upgrade would be general government (Centre + states) deficit falling below 7 per cent of the GDP, and a lot of this would have to be driven by the central government. Meanwhile, India has initiated an anti-dumping probe into the import of Chinese lift guide rails following a complaint by a domestic player. The duty is aimed at protecting the domestic industry from cheap imports. Coal industry stocks will be in focus as the government said that coal production from the captive and commercial coal mines grew by 35 per cent to 39.53 million tonnes (MT) in the first quarter of this fiscal. The coal production from captive and commercial coal mines was 29.26 MT in the first quarter of FY24. There will be some reaction in tyre industry stocks as Automotive Tyre Manufacturers' Association said its members are witnessing a severe crunch in the availability of domestic natural rubber and it may disrupt production unless supply issues of the raw material are addressed.

The US markets ended mostly in green on Wednesday as data pointing to a softening economy raised hopes the Federal Reserve could cut interest rates in September. Asian markets are trading mostly higher on Thursday as softer U.S. data narrowed the odds on a September rate cut there, boosting bonds and commodities while dragging on the dollar.

Back home, Indian equity benchmarks ended Wednesday’s session at fresh closing peaks, driven by gains in Banking, PSU and Telecom stocks amid firm global market trends. Markets opened at fresh highs with Nifty and Sensex crossing 24,300 and 80,000 marks respectively, for the first time. Traders took encouragement as Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister of India, forecast reaching a $4 trillion GDP milestone this year, outpacing global growth rates. Some solace came as the India Meteorological Department (IMD) said the southwest monsoon covered the entire country on Tuesday, six days ahead of its normal date, boosting prospects of kharif sowing. Sentiments remained optimistic as Union Minister JP Nadda revealed that India has surpassed the United Kingdom to become the fifth largest economy in the world, and is projected to soon secure the third position. He noted that the Indian economy has grown by 8.2% in 2023-24, making it the fastest-growing major economy this fiscal year. Sentiments remained up-beat in late afternoon deals, as India’s services sector activity improved during the month of June amid a stronger rise in new orders and an unprecedented expansion in international sales. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index rose to 60.5 in June from 60.2 in May. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 60.9 in June as against 60.5 in May. Meanwhile, the RBI has proposed rationalising regulations that cover export and import transactions with an aim to promote ease of doing business and empower banks to provide more efficient service to their foreign exchange customers. Finally, the BSE Sensex rose 545.35 points or 0.69% to 79,986.80, and the CNX Nifty was up by 162.65 points or 0.67% points to 24,286.50.