Markets likely to get negative start amid weakness in Asian counterparts

Indian markets ended flat on Friday after a volatile day of trade during which the benchmark gauges swung between gains and losses several times. Today, markets are likely to get negative start amid weakness in Asian counterparts. Foreign fund outflows likely to dent domestic sentiments. In India, on July 29, foreign institutional investors (FIIs) sold shares worth Rs 2,474.54 crore. Some cautiousness will come with a report that the government estimates its debt, including external borrowing, valued at current exchange rate and public account and other liabilities will increase to Rs 185 trillion, or 56.8 per cent of the GDP, during the current fiscal year. However, some respite may come later in the day as economic think tank NCAER has said the Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty. In its July 2024 issue of Monthly Economic Review (MER), NCAER said real GDP grew by 8.2 per cent in FY2023-24, driven by stable consumption demand and steadily improving investment demand. Some support may come as Union Labour Minister Mansukh Mandaviya reassured the public that there is no need for concern about job losses. He predicted that India's unemployment rate would fall below 3 per cent in the near future. Besides, the Securities and Exchange Board of India (Sebi) has proposed to expand the scope of regulations prohibiting insider trading to a wider group of people, including those connected to the officials in access to price-sensitive information. There will be some reaction in power industry stocks as the government data showed that India's total installed power generation capacity has grown around 80 per cent over the last 10 years to 446,190 MW (4.46 GW) in June 2024. On the earnings front - Castrol, Dixon Technologies, Exide, Firstsource Solutions, Gail, Indus Towers, IOC, Macrotech Developers (Lodha), Tata Consumer Products, Titagarh Rail, Torrent Power and Varun Beverages are few of the prominent companies scheduled to announce Q1 results today. In primary market, Akums Drugs and Pharmaceuticals Rs 1,857 crore IPO to open for subscription on Tuesday in the price band of Rs 646 - Rs 679 per equity share. 

The US markets ended mostly in green on Monday as investors’ awaited Fed rate meeting outcome on Wednesday. Investors are expected Fed to set the stage for a September rate cut. Asian markets are trading mostly lower on Tuesday influenced by the ongoing two-day meeting of the Bank of Japan.

Back home, Indian equity benchmarks closed flat on Monday, due to profit-taking in TECK, Telecom and Consumer Durables shares by cautious investors ahead of the key US Fed interest rate decision later this week. Markets opened at an all-time highs following positive sentiment in the global peers, as traders took encouragement with Piyush Goyal, the union minister for commerce and industry, stating that the hike in capital gains taxes is unlikely to slow down capital market activity. Buying further crept in as Fitch Ratings stated that India's post-election budget confirms that the new administration remains committed to reducing the fiscal deficit for FY25 and FY26, despite demands of the coalition government. It added the sustained focus on supporting economic growth through high public capex also points to continuity in key areas. Markets extended gains in late morning, as traders found some support from S&P Global Ratings’ statement that it does not expect recent general election results to cast a shadow on the prospects for fiscal improvements in India, even as the US credit rating agency suggested that it may further raise the country’s ratings if fiscal deficits narrow meaningfully. S&P had raised India’s sovereign rating outlook to positive from stable in May this year. Besides, latest data by the Reserve Bank of India (RBI) showed that India’s foreign exchange reserves rose by $4 billion to hit a new all-time high of $670.86 billion in the week ended July 19. Foreign fund inflows in the domestic markets also supported the sentiments. Foreign investors injected over Rs 33,600 crore into Indian equities so far this month on the expectation of continued policy reforms, sustained economic growth and a better-than-expected earnings season. Finally, the BSE Sensex rose 23.12 points or 0.03% to 81,355.84, and the CNX Nifty was up by 1.25 points or 0.01% points to 24,836.10.