Markets likely to get positive start tracking firm global cues; TCS’ Q2 result eyed

Indian markets pared their early gains, and retreated to settle in negative territory on Wednesday. Last-hour selling pressure weighed on the indices, led by notable losses in FMCG heavyweights like ITC, Nestle, HUL, and Britannia. Today, markets are likely to get positive start tracking firm global cues. Some support will come as the Reserve Bank of India’s (RBI) forward looking survey stated that consumer confidence improved in the September 2024 Survey round compared to the previous round in July due to better perceptions about the general economic, employment, and income conditions. Current situation index (CSI) improved by 0.8 points to 94.7 though it remained below the threshold level of 100. However, some cautiousness may come as Finance Minister Nirmala Sitharaman said the Carbon Border Adjustment Mechanism or CBAM is unilateral and arbitrary and will hurt India’s exports after its implementation by the European Union. CBAM are tariffs that will apply on energy-intensive goods imported into the European Union (EU). The EU has decided to impose carbon tax CBAM from January 1, 2026, on seven carbon-intensive sectors, including steel, cement, and fertiliser. Engineering goods will come under the purview of this import duty. Pharma stocks will be in focus after Department of Pharmaceuticals, Secretary Arunish Chawla said exports of India's pharmaceutical and meditech sectors are expected to sustain the growth momentum in the ongoing fiscal despite a slowdown in the global economy. He added with the government revving up support for drug development in India, as many as 16 blockbuster molecules targeted for a wide range of therapeutic areas, including cancer, diabetes, HIV and tuberculosis, are in the pipeline to be produced in India. Meanwhile, Ratan Tata, chairman emeritus of Tata Sons, passed away on Wednesday. His demise will put Tata Group stocks like Tata Motors, Tata Steel, Tata Technologies and Trent, among others in the spotlight today. TCS Q2 results press conference has been cancelled due to Ratan Tata's death, though results will be released today. India's largest information technology firm is likely to show a modest single-digit increase in both topline and bottomline compared to the September quarter of FY24. There will be some reaction in telecom stocks as a report from the Telecom Regulatory Authority of India (TRAI) showed that in a promising turn for India's telecom sector, the average monthly revenue per mobile user has seen a notable year-on-year increase of over 8%, reaching Rs 157.45 by the end of June 2024.

The US markets ended higher on Wednesday with both the S&P 500 and Dow Jones hitting record closing highs following the release of the Federal Reserve's meeting minutes and ahead of upcoming inflation data. Asian markets are trading mostly in green on Thursday following gains on Wall Street.

Back home, Indian equity benchmarks erased all their gains to settle the day marginally in red on Wednesday, as late selling in index major like ITC, Nestle and Hindustan Unilever offset the positive sentiment from the RBI's monetary policy review. After a firm opening, the indices were seen compounding their gains for the major part of the day as the Reserve Bank of India (RBI) left Repo rate and CRR unchanged at 6.5% and 4.5% respectively, in line with street expectations. It changed its stance to ‘neutral’. The central bank left CPI Inflation projection for FY25 unchanged at 4.5%. It also left GDP growth forecast for FY25 was unchanged at 7.2%. Traders took support with Oil Minister Hardeep Singh Puri’s statement that India will be able to navigate through any oil supply shock that may result from the potential widening of the conflict in the Middle East. He said while India, the world's third largest oil importing and consuming nation, is more than 85 per cent dependent on imports to meet its crude oil needs, the situation is manageable and there is no need for concern. Sentiments remained positive in afternoon deals, as Union Finance Minister Nirmala Sitharaman has commended Indian financial sector regulators for doing a ‘world-class job’ and bringing greater transparency into the system. Underlining that she is not against questioning or critiquing regulators, Sitharaman said there is a need to be ‘extremely conscious’ about contributions made by them as well. Some support came as the commerce ministry's arm DGFT has clarified that registration-cum-membership certificate is not mandatory for exporters to seek benefits under schemes like duty drawback and remission of state levies. Besides, the government notified rules easing the export of 36 items including software and technology from an Indian parent company to its foreign subsidiary in 41 countries, under a policy for dual-use products. However, in the final minutes of trade, key gauges erased gains made earlier in the day and closed with minor losses as investors turned their focus on upcoming inflation data and corporate earnings. Finally, the BSE Sensex fell 167.71 points or 0.21% to 81,467.10, and the CNX Nifty was down by 31.20 points or 0.12% to 24,981.95.