Domestic markets likely to get positive start amid overnight gains on Wall Street

Indian markets concluded with a minor gain on Thursday after hitting record highs post the US Fed's much anticipated interest rates cut of 50 bps and hinted for further reduction. Today, domestic markets are likely to get positive start led by overnight gains on the Wall Street. Sentiments will get boost as a report by S&P Global noted that India is set to become the third largest economy and transition to the upper-middle-income category by 2030-31, driven by a projected annual growth rate of 6.7 per cent this fiscal. India posted GDP growth of 8.2 per cent in FY2024, exceeding the government’s earlier estimate of 7.3 per cent, sustained reforms are crucial for India’s economic momentum to continue. Traders may take note of Economic Affairs Secretary Ajay Seth’s statement that the Fed rate cut would not have a significant impact on foreign inflows into India. Meanwhile, Petroleum Minister Hardeep Singh Puri has said that the United States is India's sixth largest energy trade partner and the growing bilateral trade has the potential to cross the $500 billion-mark from $ 200 billion at present. Stocks of ready-made garment sector will be in focus as the commerce ministry data showed that the country's ready-made garment exports (RMG) in August rose by about 12 per cent to $1.26 billion despite global headwinds and challenges such as high logistic cost. Cumulatively, RMG exports during the April-August period of 2024-25 grew by 7.12 per cent to $6.39 billion. There will be some reaction in shipping sector stocks as the government announced a series of measures aimed at addressing shipping sector issues affecting exporters and importers. These include reducing certain charges at ports and purchasing five additional second-hand container vessels by Shipping Corporation of India (SCI). Telecom stocks will be in limelight as the Supreme Court has dismissed curative petitions from telecom firms regarding adjusted gross revenues (AGR), which includes non-telecom revenue. This decision reaffirms the financial liabilities facing telecom companies, particularly amid ongoing struggles for cash-strapped operators like Vodafone. Investors will be eyeing the release of deposit growth data for September, Foreign Exchange Reserve data for September, and Bank loan growth data for September to be out late in the day. Moreover, BikeWo GreenTech IPO, SD Retail IPO, Phoenix Overseas IPO, and Avi Ansh Textile IPO will open for subscription on NSE SME today. On the flip side, Paramount Speciality Forgings IPO will close for subscription today on NSE SME today.

The US markets ended higher on Thursday the day after the Federal Reserve cut interest rates by 50 basis points and indicated more rate cuts were on the horizon. Asian markets are trading mixed on Friday ahead of a monetary policy decision in Japan as traders look for clues about future tightening.

Back home, Indian equity benchmarks trimmed most of their initial gains but managed to end marginally in green on Thursday, led by gains in Consumer Durables, Realty and Banking stocks. Markets made a gap-up opening and hit fresh all-time highs in line with firm global trends after the US Federal Reserve announced the first cut in policy rate in more than four years. Traders took encouragement as net direct tax collection grew 16.12 per cent to over Rs 9.95 trillion so far this fiscal on higher advance tax mop up. Refunds worth over Rs 2.05 trillion were issued, a 56.49 per cent jump over the same period last fiscal. Traders also took support as Commerce and Industry Minister Piyush Goyal expressed optimism that India's merchandise and services exports will surpass $825 billion despite facing global economic challenges. However, profit booking in heavyweight stocks across sectors erased most of their gains in afternoon deals. Some concern came with State Bank of India (SBI) chairman C S Setty’s statement that the Reserve Bank is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation. But markets managed to keep their heads above water till the end and ended marginally higher, taking support from Finance Minister Nirmala Sitharaman’s statement that India is standing out globally in terms of economic growth and will continue to do so in the next few years. Traders took note of the South Asian nation’s Economic Affairs Secretary Ajay Seth’s statement that the U.S. Federal Reserve’s decision to cut interest rates will not significantly impact inflows into India.  Meanwhile, the Cabinet approved continuation of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) with an allocation of Rs 35,000 crore, to be used for the procurement of agriculture commodities such as pulses, oilseeds and copra at minimum support prices. It has also approved the allocation of Rs 24,475 crore to subsidise NPK fertilisers for the rabi season. Finally, the BSE Sensex rose 236.57 points or 0.29% to 83,184.80, and the CNX Nifty was up by 38.25 points or 0.15% to 25,415.80.