Markets likely to open in green following positive cues from global peers

Indian markets ended Monday’s trading session with significant losses of around one and half a percent each, led by massive profit booking across counters. Today, markets are likely to open in green following positive cues from global peers. Sentiments will get boost as NITI Aayog CEO B V R Subrahmanyam said India's industrial sector is growing at a fast pace and the country can now aim to achieve 9 per cent plus economic growth. Subrahmanyam said India's manufacturing sector has been generating sufficient number of jobs. According to the Annual Survey of Industries (ASI) data, the number of persons employed in manufacturing industries rose 7.5 per cent in 2022-23 to 1.85 crore from 1.72 crore in the previous year. Besides, government data showed the Centre’s fiscal deficit at the end of the first five months of the current fiscal touched 27 per cent of the full-year target. The deficit was a higher 36 percent during similar period in FY24. However, foreign fund outflows likely to dent domestic sentiments. The foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 9792 crore on September 30. Traders may be concerned as the government data showed that the growth in production of eight key infrastructure sectors entered a negative zone after three-and-a-half years, contracting 1.8 per cent in August 2024 due to decline in output of coal, crude oil, natural gas, refinery products, cement and electricity. The growth rate was 6.1 per cent in July. Some cautiousness may come as Reserve Bank of India said the country’s current account deficit widened marginally to $9.7 billion or 1.1 per cent of GDP in April-June 2024, as against $8.9 billion or 1 per cent in the year-ago period. There will be some buzz in pharma stocks as rating agency ICRA in a report said revenues of Indian pharma companies are likely to expand by 9-11 per cent in the current financial year, albeit a moderation from the increase of 13-14 per cent recorded in the previous year. Metal stocks will be in focus as India has initiated an anti-dumping investigation concerning imports of Cold Rolled Non-Oriented Electrical Steel originating in or exported from China. There will be some reaction in consumer durable industry stocks as a report put out by industry body Confederation of Indian Industry (CII) showed that the consumer durable industry is projected to reach around Rs 5 lakh crore and will create around 5 lakh skilled jobs across the value chain by 2030. 

The US markets ended higher on Monday after falling following Federal Reserve chair Jerome Powell's comments that the upcoming rate cuts would not be as big as the last one. Asian markets are trading mixed on Tuesday as traders were focused on the Bank of Japan’s third-quarter Tankan survey, which assesses business optimism among large companies.

Back home, Indian equity benchmarks witnessed a sharp sell-off on Monday and ended with losses of around one and half percent, due to heavy selling in frontline stocks Reliance Industries, Axis Bank and Mahindra & Mahindra amid rising geopolitical risks in the Middle East and weakness in Japanese markets. The markets opened lower and extended the losses as the day progressed as investors avoided to take any long positions ahead of key economic indicators from India, including manufacturing, services, composite indices, current account deficit (CAD), external debt, and government budget figures, to be release during this week. Foreign fund outflows also added to the gloom. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,209.10 crore on Friday, according to exchange data. The negative trade persisted till the end, with both indices closing near their day’s lows, as traders were cautious with the Reserve Bank's former governor Raghuram Rajan’s statement that with 7 per cent economic growth, India is not creating enough jobs as reflected by the number of applicants for vacant posts in some states. He suggested the government needs to focus on promoting labour-intensive industries to generate employment. Investors overlooked commerce and industry minister Piyush Goyal’s statement that actual investments under the Production Linked Incentive (PLI) schemes were Rs 1.46 lakh crore till August and expected to increase to Rs 2 lakh crore in the coming years. This has resulted in production/sales worth Rs 12.5 lakh crore and employment generation of around 9.5 lakh (direct & indirect) which is expected to reach 12 lakh soon. Traders also paid no heed towards reports that the Department for Promotion of Industry and Internal Trade (DPIIT) is working on about 100 rules and laws of various departments of government to bring Jan Vishwas 2.0 bill, with an aim to achieve a greater ease of doing business environment in the country. The work is being done as the priority area under the first 100-day thrust of the present government. Finally, the BSE Sensex fell 1272.07 points or 1.49% to 84,299.78, and the CNX Nifty was down by 368.10 points or 1.41% to 25,810.85.