Benchmarks likely to get flat-to-positive start tracking gains in global markets

Indian markets ended flat with negative bias on Monday even as broader mid and small cap indices hit fresh record highs. Today, start of the session is likely to be flat-to-positive tracking gains in global markets. Foreign fund inflows likely to aid sentiments. Foreign institutional investors (FIIs) were net buyers in the cash segment for the fourth day in a row yesterday. They net purchased stocks worth Rs 61 crore on July 08. Some support will come as the Reserve Bank of India’s KLEMS database showed that the total number of employed people as a ratio of the total population has increased to 44.2 per cent in FY24 from 34.7 per cent in FY18, with the workforce growing by 168 million during the period at 643.3 million. Total employment was 596.7 million in FY23, thereby adding 46.6 million in FY24. Traders may take note of report that India's informal sector grew post-pandemic, with Andhra Pradesh, Bihar, and Chhattisgarh logging big output gains in fiscal 2022-23. The number of informal firms in India increased 9 percent to 65 million in 2022-23 from 59.7 million in 2022-21, according to the Annual Survey of Unincorporated Sector Enterprises data released by the Ministry of Statistics and Programme Implementation. Besides, the Indian government has reopened application window for the product-linked incentive (PLI) scheme for white goods (ACs and LED Lights) for 90 days starting July 15, 2024 to October 12, 2024. There will be some buzz in the fuel related stocks as data from the Petroleum Planning and Analysis Cell of the oil ministry showed India's fuel consumption rose by 2.6% year-on-year to 19.99 million metric tonnes in June from a year earlier. Shares of auto companies - Maruti Suzuki in particular will be in focus after the UP government in its bid towards promoting green energy waived registration fee in the state. Also, two-wheelers industry stocks will be in limelight as CareEdge Ratings report noted that the two-wheeler industry is expected to sustain a steady volume growth this fiscal driven by improved domestic sales and good traction in executive and premium segment motorcycles. There will be some reaction in insurance industry stocks with report that first-year premium of life insurance companies posted nearly 23 per cent year-on-year (Y-o-Y) growth in the April-June period of the current financial year (FY25), tracking healthy double-digit growth among the public and private sector insurers. Meanwhile, Emcure Pharma to debut on the bourses on Tuesday. 

The US markets ended mostly in green on Monday ahead of US Fed chief Jerome Powell’s testimony. Asian markets are trading mostly higher on Tuesday following the positive momentum from Wall Street.

Back home, Indian equity benchmarks witnessed a range-bound session throughout the day and ended flat on Monday owing to select profit-taking in Consumer Durables, Metal and Telecom shares. After making a cautious start, key gauges slipped into red and consolidated during the day as traders remained on sidelines ahead of corporate earnings reactions with TCS kick-in the Q1 result season on Thursday. Traders were concerned as the Reserve Bank of India (RBI) said India's forex reserves dropped $1.713 billion to $651.997 billion for the week ended June 28. Some cautiousness came with a private report that India will struggle to create enough jobs for its growing workforce over the next decade even if the economy grows at a rapid pace of 7 per cent, and it suggested the world’s most-populous nation will need more concerted steps to boost employment and skills. However, downside remained capped as traders found some support with report that foreign investors infused over Rs 7,900 crore in Indian equities in the first week of the month amid a healthy economic and earnings growth momentum. With this, total FPI investment in equities reached Rs 1.16 trillion so far this year. Some optimism also came with Ministry of Electronics and Information Technology, Secretary, S Krishnan’s statement that India has the talent and deep expertise to become a global player in the semiconductor industry which is a vital sector for the country. Meanwhile, with an aim to resolve the pending issues and close the negotiations, India and the UK will hold the next round of talks this month for the proposed free trade agreement (FTA) amid the new government taking charge in Britain. The India-UK talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles. Finally, the BSE Sensex fell 36.22 points or 0.05% to 79,960.38, and the CNX Nifty was down by 3.30 points or 0.01% points to 24,320.55.