Markets likely to get flat-to-positive start tracking gains in Asian peers

Indian markets ended flat on Thursday despite global markets experiencing significant declines due to a rotation from tech stocks into more economically sensitive sectors. Today, markets are likely to get flat-to-positive start tracking gains in Asian peers. Some support will come as Reserve Bank of India Deputy Governor M Rajeshwar Rao said Indian financial system looks stronger than in the past and the country's economy is an outlier even as strong headwinds globally. Besides, as many as 4.6 crore Income Tax return have been filed so far and the income tax department is in discussion with the technological vendors to ensure capacity to handle large volumes as the last date of July 31 nears. However, foreign fund outflows likely to dent sentiments. The foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 2605 crore on July 25. Traders may take note of report that in view of the rising number of mobile and internet banking users, the Reserve Bank of India (RBI) has proposed to tighten norms related to the liquidity coverage ratio (LCR) by increasing the run-off factor for retail deposits. There will be some reaction in stocks related to marine sector as The Marine Products Export Development Authority (MPEDA) said budget announcements for the marine sector such as rationalisation of customs duties and financing facilities will help boost the country's India's aquaculture and seafood exports. It also said the Budget includes a range of strategic measures aimed at bolstering the competitiveness of marine products, with a particular focus on shrimp production and export. Investors continue to keep close eye on earning reactions. IndusInd Bank, Power Grid Corporation, Shriram Finance, Cipla, InterGlobe Aviation, Bandhan Bank, Aarti Drugs, Amber Enterprises India, are among others to report their quarterly results later in the day. Meanwhile, shares of Sanstar, a leading Indian manufacturer of maize-based specialty products, are set to debut on the NSE and BSE today.

The US markets ended mostly in red on Thursday amid strong Q2 GDP data offset more tech weakness. Asian markets are trading mostly higher on Friday ahead of a Bank of Japan policy meeting next week.

Back home, Indian equity benchmarks, after a steep sell-off seen in the morning deals, clocked a steady recovery during the day and ended flat with negative bias on Thursday amid the monthly F&O expiry for the July series. Both indices saw a bloodbath as they opened for trade and remained in red for most part of the day, tracking sell-off in the global markets. Heavy foreign fund outflows after a hike in securities transaction tax and short-term capital gains tax also impacted markets’ sentiment negatively. Traders got cautious, amid a private report stating that foreign investors sold nearly $1 billion worth of Indian equities in the two days since the government raised taxes on derivatives trades and on capital gains from equity investments in its annual budget. However, markets managed to recover most of the lost ground in late afternoon deals, as traders took support with Revenue Secretary Sanjay Malhotra’s statement that the direct tax slabs rejig announced in the Union Budget amounting to savings of Rs 17,500 for the middle class along with an increase in the rebate limit to Rs 7 lakh in the new tax regime last year is ‘sufficient’ relief over a period of two years. Some support also came with report that global credit rating agencies have given thumbs up to the FY25 Budget, lauding the government's firm commitment to deficit reduction, with Moody’s Ratings noting that the Budget is credit positive. Meanwhile, the Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal said that about 66 per cent of taxpayers out of the over 40,000,000 filers have opted for the new regime for income tax return (ITR) filing during the current season till now. He noted that the focus of the government and the direct taxes administration is on simplification of the tax processes including filing of ITRs and conduct of other businesses with the Income Tax Department. Finally, the BSE Sensex fell 109.08 points or 0.14% to 80,039.80, and the CNX Nifty was down by 7.40 points or 0.03% points to 24,406.10.