Domestic indices likely to open on positive note

Indian markets fluctuated before finishing on a flat note Friday as Middle East tensions remained on investors' radar as fighting raged on the ground in parts of Palestinian territory despite increased efforts by the U.S. to broker a ceasefire between Israel and Hamas. Today, domestic indices are likely to open on a positive note following a strong indication from Jerome Powell's speech of an upcoming interest rate cut cycle by the US central bank during its upcoming meeting in September. Some support will come as EEPC said despite a challenging global environment, India's engineering goods exports continued their upward trajectory in July with a 3.6 per cent year-on-year growth, reflecting the sector's resilience. The Engineering Export Promotion body EEPC India chairman Arun Kumar Garodia said the engineering goods exports were $9.04 billion in July 2024, compared to $8.72 billion a year ago month. Besides, according to the latest data from the Reserve Bank of India, India’s foreign exchange reserves rose by $4.54 billion to $674.66 billion in the week ended August 16. The total reserves increased on the back of a rise in foreign currency assets, which grew by $3.6 billion during the week. In the week ended August 9, the reserves had decreased by $4.8 billion to $670.119 billion after hitting an all-time high of $674.91 billion in the week ended August 2. However, there may be some cautiousness an analysis of the latest quarterly Periodic Labour Force Survey (PLFS) showed that the jobless rate for women in urban areas worsened during the first quarter (April-June) this financial year, showing the increased barriers for women looking for work. The data shows the women unemployment rate increased in urban areas to 9 per cent in April-June (Q1) from 8.5 per cent in the preceding quarter. Stocks of gold and silver related will be in focus as the government reduced the drawback rates on exports of gold and silver jewellery by more than half to adjust for the significant cut in import duties on these precious metals in the Budget. On the export of gold jewellery, the drawback rate has been brought down to Rs 335.5 from Rs 704.1 per gram of net gold content in the article. The rate of silver jewellery and articles of silver have been cut to Rs 4,468 per kilogram of net gold content in an article. There will be some buzz in telecom stocks with report that Indian telecom players are targeting a share of 10 per cent of all 6G patents and one-sixth contributions to global standards in the next three years. Telecom industry players have proposed to systematically align research to India's needs and put in place a vibrant Standards Community.

The US markets ended higher on Friday after Powell's speech at the Jackson Hole Economic Symposium, on Friday last week. Asian markets are trading mixed on Monday ahead of inflation data that investors hope will pave the way for rate cuts in the United States and Europe.

Back home, it was a quiet trading session for Indian equity benchmarks, which remained in a narrow range during the day and ended flat, influenced by a global wait-and-see approach ahead of the US Fed Chair's speech at Jackson Hole. Middle East tensions also remained on investors' radar as fighting raged on the ground in parts of Palestinian territory despite increased efforts by the U.S. to broker a ceasefire between Israel and Hamas. After a positive start, markets witnessed volatility, as a report by ICRA stated that GDP expansion is expected to moderate to a six quarter low of 6.0 per cent in Q1FY25 from 7.8 per cent in Q4FY24, amidst a contraction in Government capital expenditure and a dip in urban consumer confidence. It further added that the growth in the gross value added (GVA) is estimated to ease to 5.7 per cent in Q1FY25 from 6.3 per cent in Q4FY24. However, from the late morning, indices held their heads above water till the end of the day, amid foreign fund inflows. As per NSE data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 1,371.79 crore. Some support came as the finance ministry, in the monthly economic report for July, maintained a positive stance on the economy, keeping the growth forecast at 6.5-7 per cent for the current financial year (2024-25/FY25) ahead of the release of gross domestic product (GDP) figures for the April-June quarter (Q1). Domestic sentiments remained positive, as the Reserve Bank of India (RBI) in its latest release ‘the minutes of the Monetary Policy Committee (MPC) meeting’ has said that the MPC expects domestic growth to hold up on the strength of investment demand, steady urban consumption and rising rural consumption. Finally, the BSE Sensex rose 33.02 points or 0.04% to 81,086.21, and the CNX Nifty was up by 11.65 points or 0.05% to 24,823.15.