Markets likely to get cautious start amid mixed global cues

Indian markets settled higher on Thursday, powered by a rally in banking and power stocks amid a largely firm trend in global markets. Today, markets are likely to get cautious start amid mixed global cues. Overnight jump in crude oil prices likely to dampen sentiments in the markets. Oil prices jumped after two sessions of decline, boosted by a spike in fuel demand as Hurricane Milton slammed into Florida, with Middle East supply risks and signs that demand from the US and China could increase also providing support. Traders will be concerned with a private report that India’s retail inflation, based on the Consumer Price Index, likely rose to 5.1% in September from 3.65% in August, primarily due to an unfavourable base effect. In September 2023, CPI inflation was at 5.02%. However, some support may come as the World Bank retained India's gross domestic product (GDP) growth forecast for FY25 at 7%, as projected last month, propelled by higher agricultural production and robust employment growth from policy initiatives, spurring private consumption. Also, the World Bank in its South Asia Development Update said India's manufacturing output would increase by 9 per cent if more women joined the workforce. Meanwhile, the Securities and Exchange Board of India (Sebi) has extended the deadline to implement direct payout of securities to demat account from October 14 to November 11 to ensure a hassle free implementation. IT stocks will be in focus after TCS result. Tata Consultancy Services (TCS) posted a 1.1 percent quarter-on-quarter (QoQ) fall in net profit for the second quarter ended September to Rs 11,909 crore, missing Street expectations. There will be some reaction in pharma stocks with a private report that the Indian pharmaceutical market (IPM) grew by 5.3 per cent in September this year, driven by major therapies showing positive value growth. Among them, urology, cardiac, and dermatology therapies saw nearly double-digit value growth of 11.8 per cent, 9.7 per cent, and 9.5 per cent, respectively, driving the overall IPM growth. Moreover, investors will be reacting to the announcement from the National Stock Exchange (NSE). Starting November 13, 18, and 19, the NSE will discontinue weekly index derivatives contracts for Bank Nifty, Nifty Midcap Select, and Nifty Financial Services, respectively, retaining only the Nifty 50 for weekly derivatives trading. Investors will keep an eye on earnings and their reaction.

The US markets ended lower on Thursday as investors looked to higher-than-expected inflation and unemployment claims for indications on the health of the U.S. economy and the path for interest rates. Asian markets are trading mostly in green on Friday as investors digested a sticky U.S. inflation report.

Back home, Indian equity benchmarks erased most of their initial gains but managed to end marginally in green on Thursday due to gains in Banking, Power and Utilities stocks amid a firm trend in global markets. Markets opened on a positive note and extended gains in morning deals, as traders took support after 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. But, key gauges came off from day’s highs in late morning deals and remained rangebound for the rest of the session. Traders took some support as Reserve Bank of India (RBI) in its latest ‘Industrial Outlook Survey of the Manufacturing Sector for Q2:2024-25’ has said that manufacturers maintained their optimism on demand conditions for Q3:2024-25. Besides for Q3:2024-25, cost of financing and salary outgo are likely to rise, while pressures from raw material cost are expected to ease, and selling price growth momentum may continue. The business expectations index (BEI) improved to 120.3 in Q3:2024-25 from 119.1 in the previous quarter. But markets ended with minor gains as traders were cautious as private report said that India's retail inflation in September likely overshot the Reserve Bank of India's (RBI) 4 per cent medium-term target for the first time since July due to a persistent rise in vegetable prices and a lower year-ago base. Finally, the BSE Sensex rose 144.31 points or 0.18% to 81,611.41, and the CNX Nifty was up by 16.50 points or 0.07% to 24,998.45.