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

Indian markets ended at record closing highs on Thursday driven by gains in IT stocks as they announced positive Q1 results for FY25. Today, markets are likely to get flat-to-positive start despite negative cues from global markets. Some support will come as information technology giant Infosys posted better-than-expected June quarter (Q1) results after market hours on Thursday. The stock's ADR surged over 8 per cent in the overnight session on NYSE. Additionally, movement in stocks of heavyweights like Reliance Industries and HDFC Bank, ahead of their Q1FY25 results today and tomorrow, respectively, will guide the markets. Sentiments will get boost as the latest round of FICCI’s Economic Outlook Survey said Indian economy is expected to grow at an annual median GDP growth of 7 per cent in 2024-25. This forecast comes on the heels of Reserve Bank of India (RBI) raising its GDP growth projection to 7.2 per cent for this fiscal. Also, the RBI's monthly bulletin said the second quarter (July-September) of 2024-25 has begun with signs of quickening momentum in the Indian economy as an improvement in the outlook for agriculture and the revival of rural spending have turned out to be the bright spots in the evolution of demand conditions. Some optimism may come as Crisil noted that India's exports have shown resilience amidst global challenges, with merchandise exports rising by 5.8% to $109.96 billion in the first quarter of fiscal 2025. Traders may take note of data released by the Reserve Bank of India (RBI) showing that overseas Indians deposited close to $3 billion in non-resident Indian (NRI) deposit schemes in April-May FY25, which is over four times higher than the amount deposited in these schemes in the same period last year. There will be some reaction in e-commerce industry stocks as private report stated that India should increase the consignment limit of a courier exported through the e-commerce channel to $50,000 (around Rs 41 lakh) from the current limit of $12,000 (Rs 10 lakh). Sugar stocks will be in focus as ICRA said India’s net sugar production for the sugar season 2025 starting October is projected to decline to 30 million tonnes (mt) from 32 mt in the previous year on expectations of higher diversion will be allowed to ethanol. There will be some buzz in fintech industry stocks with a private report that the Indian fintech industry is estimated to be around $110 billion in 2024 and its projected to reach about $420 billion by 2029. As per the report, the sector is expected to continue to grow due to factors like favourable policies of the government.

The US markets ended lower on Thursday reversing early gains as investors continued to rotate away from high-priced megacap growth stocks and second-quarter earnings season gathered steam. Asian markets are trading in red on Friday as investors on Wall Street continued to rotate out of tech stocks and take profits from the rally in equities in recent weeks.

Back home, Indian equity benchmarks gained sharply during late deals on Thursday to scale their new record closing high levels, supported by gains in IT, TECK and FMCG stocks. Key indices opened lower and witnessed lackluster trading in the first half, as investors continued to trade with caution ahead of the Budget announcement. Rising crude oil prices weighed on the domestic sentiments. Traders also remained cautious with analysis of the latest KLEMS (Capital, Labour, Energy, Material and Service) database released by the Reserve Bank of India (RBI) showing that as many as nine out of 27 industries saw their labour productivity contract in FY23 compared to the preceding year, with eight of these industries belonging to the manufacturing sector, thus highlighting India’s lack of competitiveness in industrial sectors. However, sharp surge in the afternoon session pushed benchmarks to record high levels. Traders took encouragement 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. Some solace also came after the Asian Development Bank (ADB) in its July edition of the Asian Development Outlook (ADO) maintained India’s GDP growth forecast at 7 per cent for the current financial year (FY25), citing that a rebound in agriculture is expected given above-normal monsoon projections. Traders also took note of private report that India is aiming to boost annual foreign direct investment by more than 50% to help lift economic growth. Finally, the BSE Sensex rose 626.91 points or 0.78% to 81,343.46, and the CNX Nifty was up by 187.85 points or 0.76% points to 24,800.85.