Markets likely to get optimistic start on firm global cues

Indian markets after making strong start turned volatile and ended flat on Monday amid tepid trade across sectors. Today, markets are likely to get optimistic start, tracking bullish sentiment from global markets. Some support will come as latest data released by the Reserve Bank of India showed that net foreign direct investment (FDI) during the April-June period of the current financial year was $6.9 billion, compared to $4.7 billion in the year-ago period. The increase was due to an improvement in gross inward FDI, which grew by 26.4 per cent year-on-year (Y-o-Y) to $22.5 billion during Q1 of 2024-25. Traders may take note of data released by the Reserve Bank of India (RBI) showed overseas Indians deposited around $4 billion in non-resident Indian (NRI) deposit schemes in April - June FY25, up 79 per cent over the amount deposited in these schemes in the same period last year. Meanwhile, to legally validate and streamline disclosure in respect of debenture trustee appointments in offer documents, markets regulator SEBI has proposed to replace the term consent letter with debenture trustee agreement. However, some cautiousness may come as amid concerns from the Reserve Bank of India (RBI) about the slower pace of deposit growth than that of loans, a report by SBI Research said that incremental deposit growth at Rs 61 trillion has exceeded incremental credit growth of Rs 59 trillion since FY22. It noted thus, the myth of a flagging deposit growth appears as just a statistical myth with credit growth outpacing deposit growth being tom-tommed as a deceleration in deposit growth. Metal & mining sector stocks as Fitch Ratings said Indian metal and mining companies' operating costs are likely to rise significantly if state governments impose additional mining taxes in the wake of a Supreme Court ruling. The aviation industry stocks are in focus after data released by the Directorate General of Civil Aviation (DGCA) showed that Indian carriers flew more than 12.9 million passengers in July, an increase of more than 7.3 per cent compared to the year-ago period. However, the air traffic in July was lower compared to 13.2 million people carried by the domestic airlines in June this year. Meanwhile, Shares of Saraswati Saree Depot IPO will list on BSE and NSE today.

The US markets ended higher on Monday building on their largest weekly percentage gain of the year as investors focused on the Democratic National Convention and the upcoming Jackson Hole Economic Symposium. Asian markets are trading mostly in green on Tuesday buoyed by Wall Street's rally and the release of key economic data from China.

Back home, Indian equity benchmarks ended flat in a range bound session on Monday as investors preferred to remain on the sidelines awaiting further triggers. Market participants also booked profits in select blue-chip stocks amid high valuation concerns. Markets made a positive start and stayed in green for most part of the day, amid foreign fund inflows. The foreign institutional investors (FIIs) turned net buyers on August 16 as they bought equities worth Rs 766 crore. However, key gauges erased initial gains and traded flat with negative bias in late morning deals, as traders turned cautious as data released by the Reserve Bank of India showed that India’s foreign exchange reserves decreased by $4.8 billion, reaching $670.12 billion for the week ending August 9, falling from the previous all-time high. Forex reserves, as of August 2, had touched an all time high of $675 billion, reflecting a robust external sector performance. But, markets regained traction and managed to keep their heads above water in second half of trading session, as traders were getting some support amid reports that Chief negotiators of India and Australia will begin the next round of talks for the comprehensive free trade agreement from today in Sydney, where both sides are likely to close negotiations on several chapters of the pact. Traders took note of International Monetary Fund’s (IMF) deputy managing director Gita Gopinath’s statement that India should invest in creating a skilled workforce, putting in place a better infrastructure while undertaking land, labour and taxation reforms to meet its aspiration to become a developed country by 2047. But, markets failed to hold gains and ended largely unchanged as selling pressure from automobile and banking stocks weighed on the indices. Meanwhile, a government survey showed that the unemployment rate in urban areas for individuals aged 15 years and above was 6.6 per cent in April - June 2024 (Q1 FY25), remaining unchanged from the first quarter of FY24. As per the Periodic Labour Force Survey, India's unemployment rate for the quarter ended on June 30 declined from Q4 FY24 when the rate stood at 6.7 per cent. Finally, the BSE Sensex fell 12.16 points or 0.02% to 80,424.68, and the CNX Nifty was up by 31.50 points or 0.13% to 24,572.65.