Markets likely to get negative start amid weak global cues

Indian markets fell slightly on Thursday, mirroring steady global equities amid ongoing uncertainty about the US economy's health and the pace of potential Federal Reserve rate cuts. Today, markets are likely to get negative start amid weak global cues, as investors await critical US payroll data scheduled to be released later today. This data will be significant as it could decide whether a rate cut expected this month will be regular or super-sized. On the domestic front, investors will eye bank loan growth, deposit growth, and foreign exchange reserve data. Further, India has surpassed China to become the top weight nation in the MSCI Emerging Market (EM) Investable Market Index (IMI) for the first time. Foreign fund outflows likely to dent sentiments. As per NSE data, Foreign Institutional Investors (FII) were net sellers of Indian equities worth Rs 688.69 crore on September 05. As per a private report, August was a tale of two halves when it came to overseas flows into the domestic equities. While during the first half of the month, the foreign portfolio investors (FPIs) were sellers amid concerns of a US recession, they turned into strong buyers in the second half as those apprehensions receded. Traders may take note of report that India and Singapore have announced the signing of a key bilateral pact to partner and cooperate in the field of semiconductors, as the two countries elevated their ties to a comprehensive strategic partnership. Meanwhile, the Goods and Services Tax (GST) Council is scheduled to hold a meeting on Monday, where members could likely decide on four options regarding tax treatment of health insurance. The cost to the exchequer could potentially range from nearly Rs 650 crore to Rs 3,500 crore. IT stocks will be in focus with a private report that The Indian IT sector has reported a 6 per cent year-on-year (Y-o-Y) increase in revenue per head (RPH) in the first quarter of financial year 2025 (Q1FY25). There will be some reaction in coal industry stocks as the Union coal ministry issued allocation orders for three coal mines on September 5, namely Machhakata (Revised), Kudanali Lubri and Sakhigopal-B Kakurhi. The allocated mines are expected to generate an annual revenue of Rs. 2,991.2 crores calculated on the basis of PRC (and will attract Capital Investment of Rs. 4,500 crores, according to the statement issued by the ministry on September 5. Moreover, Shares of Baazar Style Retail's initial public offer (IPO) will be listed on the NSE and BSE today. Shares of Boss Packaging Solutions IPO will list today on NSE SME.

The US markets ended mostly in red on Thursday as investors stayed confused on the US economic outlook. Asian markets are trading mixed on Friday as Japan's foreign exchange reserve data for August and household spending data for July will be on investors' radar.

Back home, Indian equity benchmarks ended marginally lower on Thursday tracking losses in the most valuable firms Reliance Industries, Tata Motors and Nestle amid a negative trend in global markets. Markets made a positive start as traders took support with NITI Aayog CEO B.V.R. Subrahmanyam’s statement that the Free Trade Agreement (FTA) being negotiated between India and the UK is in the final stages with both sides within finger-touching distance to clinch an agreement. The FTA is aimed at significantly enhancing the estimated GBP 38.1 billion a year bilateral trading partnership. Foreign fund inflows also supported the domestic markets. Foreign institutional investors (FII) bought shares net worth Rs 975.46 crore on September 04, 2024, according to the provisional data available on the NSE. However, key indices failed to hold on to opening gains and slipped into red in late morning deals, amid a lack of major domestic triggers, as investors were focusing on upcoming US economic data to gauge the Federal Reserve's next move. Markets continued to trade with minor losses in late trade even as Reserve Bank of India (RBI) Governor Shaktikanta Das said that India's growth story remains intact. He noted that the central bank’s 7.2 percent GDP growth projection for FY25 is not out of place and structural drivers are playing a bigger role in macroeconomic outcome. RBI Governor further said that data shows fundamentals of growth drivers are gaining momentum. Traders also paid no heed towards the Directorate General of Foreign Trade (DGFT) stating that the government has extended the interest equalisation scheme on pre- and post-shipment rupee export credit for one more month till September 30 this year to promote the country's outbound shipments. Finally, the BSE Sensex fell 151.48 points or 0.18% to 82,201.16, and the CNX Nifty was down by 53.60 points or 0.21% to 25,145.10.