Markets likely to get flat-to-negative start on Friday

Indian markets continued their record rally for the second straight session but closed slightly higher on Thursday. Today, markets are likely to get flat-to-negative start amid lack of directional cues from Wall Street as well as rise in crude oil prices. As per a report, oil prices for Brent crude hit their highest level since April on Thursday, holding above $87 after data the previous day showed a decline in US inventories. However, some support may come later in the day amid foreign fund inflows. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 2,575.85 crore on Thursday. Traders may take note of report that the government is working towards streamlining the application process for Indian business visas for companies that are not beneficiaries under the production-linked incentive (PLI) scheme but have set up manufacturing units across the 14 sectors covered under the scheme. Meanwhile, the Ministry of External Affairs (MEA) said India and the United Kingdom have agreed to deepen cooperation between their cyber agencies in order to build a safe and robust cyberspace. There will be some buzz in the FMCG sector stocks as CRISIL Ratings in a report said that the fast-moving consumer goods (FMCG) sector is expected to see a revenue growth of 7 to 9 per cent this fiscal, helped by higher sales volume and a revival of rural markets. It added volume growth from urban consumers will also remain steady at 7 to 8 per cent supported by rising disposable incomes and continued focus on premium offerings by the industry players, especially in the personal care and home care segments. Cement industry stocks will be in focus as a report from rating agency ICRA showed that the cement sector has witnessed a muted growth of 2-3 per cent in the first quarter of current fiscal on account of a slowdown in construction activity because of the Lok Sabha polls. However, the overall volumes for the FY2024-25 are likely to expand by 7-8 per cent driven by a healthy demand from the infrastructure and housing sectors. There will be some reaction in port sector stocks with report that cargo traffic across 12 major Indian ports rose 6.8 per cent to 69.08 million tonnes (MT) in June from 64.69 MT in the year-ago month, with 10 ports showing positive growth while the remaining two witnessed a decline. Natural gas related stocks will be in limelight as Ayush Agarwal, at S&P Global Commodity Insights stated that India’s booming liquefied natural gas imports are likely to slow as cooler weather due to monsoon rains crimps electricity demand and increases in hydropower crowd out expensive gas-fired generators. He added electricity demand won’t be as high as it was in May and June, which is the prime driver of higher LNG imports. 

The US markets were closed on Thursday for Independence Day. Asian markets are trading mostly higher on Friday buoyed by expectations of U.S. interest rate cuts in September and a positive investor sentiment.

Back home, Indian equity benchmarks steadily pared gains after scaling new life-time highs in early trades, but managed to close marginally in green on Thursday due to selective buying in Healthcare, IT and TECK stocks amid a largely positive trend in global equities. Markets opened at a record high as traders took encouragement with a CRISIL Ratings report stating 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 with robust GST collections and devolution of finances from the Centre, which comprise around 50 per cent of the aggregate state revenues. Traders took a note of S&P Global Ratings’ report stating that 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. However, markets trimmed most of their gains throughout the day but managed to scale fresh record closing highs, taking support from a research paper by the economic think tank NCAER stating 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. Some solace also came amid a private report stating that India aims to clock $2 trillion goods and services exports by 2030 amid the Red Sea crisis and two ongoing wars. Ecommerce exports are growing rapidly and those done through the postal and courier routes are pegged at $1.5 billion. Besides, another private report stated that the government is likely to increase subsidies on rural housing in the upcoming Budget 2024 by up to 50 percent from the previous year to more than $6.5 billion. Finally, the BSE Sensex rose 62.87 points or 0.08% to 80,049.67, and the CNX Nifty was up by 15.65 points or 0.06% points to 24,302.15.