Domestic indices likely to get cautious start amid weak cues from global peers

Indian markets ended higher on Tuesday, propelled by robust buying in banking, financial and auto stocks amid a largely firm trend in global equities. Today, markets are likely to get cautious start amid weak cues from global peers. However, some support will come as Krishnamurthy V Subramanian, executive director, International Monetary Fund (IMF) said Indian economy is slated to grow to $55 trillion by 2047, if the country is able to register an average real growth rate of 8 per cent in the coming years with average inflation remaining around 5 per cent. Traders will be taking encouragement as the Labour Ministry said retirement fund body EPFO has registered a net addition of 19.29 lakh members in June 2024. The ministry stated that a year-over-year analysis showed a 7.86 per cent growth in net member additions compared to June 2023. It noted this surge in membership can be attributed to numerous factors, including increased employment opportunities, a growing awareness of employee benefits, and the effectiveness of EPFO’s outreach programmes. Traders may take note of Reserve Bank of India Governor Shaktikanta Das’ statement India’s inflation must show signs of settling around the central bank’s target of 4 percent on a sustainable basis before a rate cut can be considered. The inflation rate in July eased below the RBI’s target for the first time since 2019, but the central bank expects it to climb back again from September. Meanwhile, External Affairs Minister S. Jaishankar emphasized that India's deepening engagement with the East is a natural extension of its Act East policy, reflecting a growing focus on the region. He noted, the proportion of our activities and interests East of India has been steadily increasing. There will be some buzz in telecom sector stocks as revealed in the latest annual report released by the Telecom Regulatory Authority of India (TRAI) showed that the Indian telecom sector has achieved growth during the financial year 2023-2024. It reveals that India’s overall teledensity rose from 84.51 per cent at the end of March 2023 to 85.69 per cent at the end of March 2024, marking an annual growth rate of 1.39 per cent. Mining sector stocks will be in focus as Moody's Ratings said the Supreme Court ruling on royalties and taxes will be credit negative for mining companies like Tata Steel, UltraTech Cement, and Vedanta Resources, as it will dent their cash flows and affect their profitability. There will be some reaction in insurance industry stocks with a private report that the share of life insurance policies sold by top private insurers in the rural areas declined in the financial year 2023-24 (FY24) compared to previous year. Besides, Interarch Building Products IPO closes for public subscription today. Orient Technologies IPO opens for public subscription today.

The US markets ended lower on Tuesday breaking their recent winning streak amid few market-moving catalysts ahead of the Jackson Hole Economic Symposium, set to get under way on Thursday. Asian markets are trading mostly in red on Wednesday tracking Wall Street as both the S&P500 and Nasdaq Composite snapped an eight-day winning streak.

Back home, A financials rally triggered Indian equity markets to garner notable gains on Tuesday, with further support from positive global cues, bolstered by expectations that US Fed Chair Jerome Powell will provide clear signals on the potential size of a rate cut in September during the upcoming Jackson Hole Symposium this week. The start of the day was on a positive note, after the latest data released by the Reserve Bank of India (RBI) 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. Firm trade persisted over the Dalal Street till the end, as domestic sentiments remained upbeat with the RBI’s latest monthly Bulletin stating that in India, aggregate demand conditions are gathering momentum with revival in rural consumption on the back of growing incomes. This stimulus to demand is expected to reinvigorate the hitherto subdued participation of the private sector in total investment. Headline inflation moderated from its spike in June to 3.5 per cent in July, but this was primarily due to the downward statistical pull of base effects. Besides, Finance minister Nirmala Sitharaman asked public sector banks, or PSBs, to make concerted efforts to mobilise deposits by conducting special drives to sustainably fund credit growth. Finally, the BSE Sensex jumped 378.18 points or 0.47% to 80,802.86, and the CNX Nifty was up by 126.20 points or 0.51% to 24,698.85.