Domestic equity markets likely to open on positive note

Indian markets plunged more than three percent intraday on Monday driven by weak global sentiments led by potential US recession worries. Today, domestic equity markets are likely to open on a positive note tracking positive sentiment in Asian peers. Traders will be taking encouragement as a private report stated that India's economy is expected to grow at 7-7.2 per cent in the current fiscal year driven by robust economic fundamentals and continuity in domestic policy reforms. As per the report, several initiatives in the Union Budget 2024-25 toward improving agriculture productivity, creating jobs for the youth, and in manufacturing and addressing the challenge of access to finance for micro, small, and medium enterprises (MSMEs), would help improve supply-side demand, curb inflation, and prop up consumer spending, especially in rural areas. Meanwhile, markets regulator Sebi has proposed a uniform timeline to ensure timely credit and trading of bonus shares in a bid to streamline the process to enable T+2 trading of such shares after the record date. However, foreign fund outflows likely to dent sentiments. Domestically, foreign institutional investors (FIIs) sold shares worth Rs 10,073.75 crore on August 5. Port sector socks will be in focus as the data released by major ports' apex body Indian Ports Association showed that crgo traffic at 12 major ports in the country grew 5.92 per cent to 70.08 million tonnes (MT) in July from 66.17 MT handled in the year-ago period. The data also showed that 10 of these major ports logged positive growth in cargo traffic handling, while the remaining two saw a negative growth. There will be some reaction in edible oil industry stocks with a private report that the country is aiming to increase domestic palm oil production from the current level of 0.4 million tonne (MT) to 2.5 MT by 2032 under the national oil palm mission through adding at least 0.1 million hectare (MH) of new plantation annually in the five to six years. Stocks of Bharti Airtel and ONGC are likely to be in limelight as they react to Q1 numbers announced post market hours yesterday. Airtel reported over 158 per cent growth in profit, while ONGC’s profit declined by 32 per cent year-on-year. Moreover, a total of six new listings will happen today. Shares of Akums Drugs and Pharmaceuticals will debut in the mainline bourses. Sathlokhar Synergys E&C Global, Bulkcorp, Rajputana Industries and Ashapura Logistics will be listed on the NSE SME plaftform. Kizi Apparels to debut on the BSE SME platform. In primary market, Brainbees Solutions, the parent company of FirstCry, Rs 4,193.73 crore IPO will open for subscription in the price band of Rs 440 - Rs 465 per share. Investors will also be monitoring quarterly earnings reports today and awaiting the Reserve Bank of India’s (RBI) monetary policy decision, scheduled for August 8.

The US markets ended lower on Monday as the market extended last week's sell-off amid U.S. recession worries and as Apple shares fell sharply on news that a big investor had cut its stake. Asian markets are trading mostly in green on Tuesday amidst Japan's June household spending falling more than expected, dropping 1.4 per cent year-over-year in real terms.

Back home, extending southward journey for second straight session, Indian equity benchmarks tumbled sharply on Monday, mirroring global market fears of a potential recession in the US economy.  After a gap-down start, key gauges inched gradually lower throughout the day, amid selling across the sectors. Traders remained cautious as exchange data showed foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,310 crore on Friday. The mood on the street remained cautious as data from the central bank showed India's foreign exchange reserves halted a three-week gaining streak and stood at $667.39 billion as of July 26, coming off record highs. Traders also reacted negatively to survey report that India’s services sector growth eased during the month of July as higher wage and material costs continued to push up business expenses, with the overall rate of inflation quickening from June. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index eased to 60.3 in July from 60.5 in June. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also fell to 60.7 in July as against 60.9 in June. However, towards the end, markets recovered some of the losses, as traders took some support with a report that India’s unemployment rate (UR) dropped by 1.3 percentage points in July from an eight-month high of over nine per cent in the previous month. The UR fell to 7.9 per cent in July from 9.2 per cent in June. Some support also came with Revenue Secretary Sanjay Malhotra’s statement that the government remains committed to fairness, simplicity and equity in the tax system. He said the government’s ongoing efforts are to simplify tax laws, improve tax compliance, and support economic growth through prudent fiscal policies and the Union budget was in that direction. But, markets failed to hold recovery and ended with deep cuts. Meanwhile, Minister of State for Commerce and Industry Jitin Prasada has said that the free trade agreement (FTA) signed between India and the four European nation bloc EFTA in March is under the ratification process in those countries. He said there is no fixed time frame for the ratification, as the process is different in each of the EFTA (European Free Trade Association) countries. Finally, the BSE Sensex fell 2222.55 points or 2.74% to 78,759.40, and the CNX Nifty was down by 662.10 points or 2.68% points to 24,055.60.