Domestic indices likely to start Thursday’s trading session on positive note

Indian market extended the winning streak for the third consecutive session on Tuesday with benchmarks hitting fresh record highs amid buying seen in the IT, realty and FMCG stocks. Today, domestic indices are likely to start Thursday’s trading session on a positive note following the trading holiday on Wednesday on account of Moharram. Earnings boost and Budget-related expectations likely to keep the mood upbeat. Infosys, Havells India, LTTS, Mastek, Persistent Systems, Polycab India, Shoppers Stop, Tata Communications and Tata Technologies are among the prominent companies scheduled to announce Q1 results today. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 1,271.45 crore in the cash market on July 16. Sentiments will get boost as the International Monetary Fund in its World Economic Outlook raised India’s growth forecast for FY25 to 7 percent from 6.8 percent projected in April. It noted the forecast for growth in India has been revised upward, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas. Traders will be getting encouragement as the Asian Development Bank (ADB) said India’s stronger-than-expected fiscal position could provide a further boost to its growth, and kept the Gross Domestic Product (GDP) growth projection for the current financial year (FY25) unchanged at 7 per cent.  Stocks related to jewelary industry will be in focus after data by Gem and Jewellery Export Promotion Council (GJEPC) showed that India's overall gems and jewellery exports witnessed an on-year decline of 13.44 per cent in June 2024 at Rs 15,939.77 crore ($1,909.57 million) against Rs 18,413.88 crore ($2,240.77 million) during June 2023 amid muted demand in overseas markets. There will be some reaction in pharma stocks with a private report that the Indian pharmaceutical and healthcare sector witnessed a surge in activity during Q2CY24, securing 55 deals worth $4.1 billion, a 49 per cent increase compared to the corresponding period last year. Aviation industry stocks will be in limelight as data by the Directorate General of Civil Aviation (DGCA) showed that domestic airlines flew around 79.348 million passengers in India during the first half (January to June) of 2024. This was a 4.28 per cent increase compared to 76.093 million passengers who travelled during the same period the previous year.There will be some buzz in the cotton industry stocks as rating agency ICRA said the domestic cotton spinning industry will recover in FY25, growing 6-8 per cent. It added the recovery will be aided by 4-6 per cent volume growth and mild-realisation gains.

The US markets ended mostly in red on Wednesday with the S&P 500 and NASDAQ taking a sharp hit dragged by a sell-off in technology stocks amid fears of a trade-war with China. Asian markets are trading mostly lower on Thursday as chip-related stocks dropped following reports of more stringent export restrictions from the U.S. and as comments from former U.S. President Donald Trump raised geopolitical tensions.

Back home, Indian equity benchmarks pared most of the day's gains and ended flat with a positive bias on Tuesday, as investors continued to trade with caution ahead of the Budget announcement. After a positive start, key indices extended the gains as the session progressed and hit new milestones in the first half, as foreign investors have turned buyers in the Indian equities. According to exchange data, Foreign Institutional Investors (FIIs) bought equities worth Rs 2,684.78 crore on Monday. Traders took support with commerce ministry’s data showing that India's merchandise export increased by 2.56 per cent to $35.20 billion in June 2024 as compared to $34.32 billion in June last year. Traders took a note of Reserve Bank of India (RBI) data showing that India’s outward foreign direct investment (FDI) commitments rose to $2.14 billion in June 2024, compared to $1.14 billion in June 2023. Sequentially, they declined from $2.22 billion in May 2024.  Besides, encouraging quarterly results by some blue-chips have also supported the markets. Sentiments remained optimistic in late afternoon deals, taking support from CRISIL report stating that industrial activity in the current fiscal year is poised to gain support from domestic consumption, with an anticipated improvement in private consumption, which had weakened to 4 per cent last fiscal. However, the domestic markets failed to uphold the initial gains and ended flat. Traders turned cautious with commerce secretary Sunil Barthwal’s statement that India has flagged concerns over non-tariff barriers (NTBs) faced by its exporters with the Russian government. NTBs faced by Indian exporters are mainly in sectors such as marine products and pharmaceuticals. For instance, India has been finding it difficult to export marine products to Russia as exporters face certification and listing challenges related to exports. Finally, the BSE Sensex rose 51.69 points or 0.06% to 80,716.55, and the CNX Nifty was up by 26.30 points or 0.11% points to 24,613.00.