Markets likely to start session in green tracking gains in global markets

Indian markets ended lower on Tuesday, after a positive start, as the underlying nervous mood in global markets weighed on the investor sentiment. Today, start of the session is likely to be in green tracking gains in global markets. Investors will be keeping a close watch on quarterly earnings reports. Also, market participants will be eyeing outcome of the RBI policy meeting on Thursday. Reserve Bank's rate-setting panel started its three-day deliberations for the next set of bi-monthly monetary policy amid expectations of no change in benchmark interest rate in view of concerns on inflation and economic growth remaining steady. Some support will come as a Labour Ministry report showed that retail inflation for industrial workers slipped to 3.67 per cent in June from 3.86 per cent in the previous month this year mainly due to lower prices of certain food items. It said year-on-year inflation for the month of June 2024 moderated to 3.67 per cent as compared to 5.57 per cent in June 2023. Traders may take note of S&P Global Ratings’ statement that India stands out both on growth and external fronts amongst the South Asian countries, and the trajectory of government's fiscal deficit will decide on the direction of sovereign ratings. Besides, data by Central Depository Services (CDSL) and National Securities Depository (NSDL) showed that demat account additions continue to rise at a healthy pace with over 4.55 million additions in July, taking the total count to nearly 167 million. However, foreign fund outflows likely to dent sentiments. On Tuesday, foreign institutional investors (FIIs) net sold stocks to the tune of Rs 3,531.24crore. There will be some buzz in the banking stocks with report that banks have written off loans worth Rs 9.90 trillion in the last five financial years. Minister of State for Finance Pankaj Chaudhary said during 2023-24, banks loan write off was at Rs 1.70 trillion, as against Rs 2.08 trillion in the previous fiscal. Electric vehicle industry stocks will be in focus as the monthly sales data from Federation of Automobile Dealers' Association (FADA) showed that electric vehicle sales registered a 55.2 per cent on-year growth at 179,038 units in July driven by a massive 96 per cent jump in e-two-wheeler sales. As per data, the total electric vehicles sales for July 2023 were at 116,221 units. There will be some reaction in real estate stocks as the government introduced an amendment that provides taxpayers with a choice for calculating long-term capital gains taxes on property purchases made before July 23, 2024. Taxpayers can now opt for either the new 12.5 percent rate without indexation or the previous 20 percent rate with indexation, allowing them to select the option that results in a more favourable tax outcome. Meanwhile, Utssav Cz Gold Jewels is scheduled to list on the SME platform.

The US markets ended higher on Tuesday as investors jumped back into the market a day after a dramatic sell-off, with recent comments by Federal Reserve officials easing U.S. recession worries. Asian markets are trading in green on Wednesday following a rebound in major US indices after three consecutive days of losses.

Back home, Indian equity benchmarks surrendered early gains and ended lower for the third straight session on Tuesday, dragged by a decline in PSU, Telecom and Consumer Durables stocks amid global uncertainties which has led to profit booking. Markets started the day on an upbeat note and stayed in green for most part of the day, buoyed by a rebound in Asian markets. Traders took 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. Sentiments remained up-beat as think tank GTRI stated that reforms in certain customs and banking rules, access to credit, and incentives at par with China will be key for India to boost its exports through e-commerce medium to $350 billion by 2030. However, in the late afternoon deals, selling pressure intensified and the indices wiped off all their gains to end the session with losses. Traders turned cautious with reports that the finance ministry has intensified its monitoring of the West Asian conflict following last week's assassination of the Hamas chief in Iran, an act attributed to Israel, which has raised fears of a broader regional escalation. This conflict could impact global oil prices, capital flows, currency movements, and shipping costs. Despite these concerns, the conflict is unlikely to pose any major risk yet, with India's robust macroeconomic fundamentals expected to help it withstand any potential crisis without significant damage. Besides, the exchange data showed Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,073.75 crore on Monday. Finally, the BSE Sensex fell 166.33 points or 0.21% to 78,593.07, and the CNX Nifty was down by 63.05 points or 0.26% points to 23,992.55.