Markets likely to get negative start amid mixed global cues

Indian markets witnessed a sharp selloff and ended lower for the third straight session on Thursday, despite firm US and European cues, as foreign fund selling coupled with a sharp fall in automobile stocks weighed on sentiment. Today, markets are likely to get negative start amid mixed global cues. Traders will be concerned as a report by the State Bank of India (SBI) stated that India's imported inflation reached a 13-month high in September 2024, growing by 2 per cent. The report highlighted that imported inflation is increasingly contributing to the country's overall inflation, as rising prices of gold, oils and fats, and chemical products drive the increase. There may be some cautiousness with S&P Global Ratings’ statement that India is poised to be the third largest global economy by 2030 but rising population presents mounting challenges in basic service coverage and growing investment needs to maintain productivity. However, some support may come later in the day with report that direct tax collections have surged 182 per cent to over Rs 19.60 trillion in 2023-24 in the 10-year period of Prime Minister Narendra Modi-led government. The latest 'Time Series Data' released by the income tax department showed that the corporate tax collections more than doubled to over Rs 9.11 trillion in 10 years to 2023-24 fiscal. Personal income tax mop up grew close to four-fold to Rs 10.45 trillion during the period. Traders may take note of Moody's Ratings’ statement that India has made rapid progress building its renewables capacity, but its fast-growing economy and expanding population will drive up carbon-intensive product demand. Moody's expects India to remain one of the fastest growing economies in the world with real GDP growing 7.2 per cent in 2024 and 6.6 per cent in 2025. It added the country is likely to sustain similarly high rates of growth over the next decade. Banking stocks will be in focus as the Reserve Bank of India (RBI) data showed that the pace of bank deposit mobilisation slowed down to 11.79 per cent year-on-year (Y-o-Y) as of October 4, 2024, from 13.6 per cent a year ago. Pharma stocks will be in limelight as Union Commerce and Industry Minister Piyush Goyal recently held a crucial meeting with several prominent stakeholders from the pharmaceutical industry to address concerns of pharmaceutical exporters. IT stocks will be in focus after Infosys raised its full-year revenue growth guidance to 3.75-4.5 percent, topping up on the surprise hike to 3-4 percent announced in July. Investors continue to keep close eye on earnings of the companies.

The US markets ended mostly in green on Thursday as stronger-than-expected monthly retail sales indicated a robust U.S. consumer and TSMC's upbeat forecast buoyed chipmakers' stocks. Asian markets are trading mostly higher on Friday as investors assessed crucial GDP growth data from China and Japan's inflation figures.

Back home, Indian equity benchmarks ended lower for the third straight session on Thursday as some of the quarterly results of key companies failed to impress the markets. Intense selling in realty, auto, consumer discretionary and consumer durable stocks also dragged the markets lower. Markets made flat-to-positive start but soon slipped into red terrain amid unabated foreign fund outflows. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,435.94 crore on Wednesday, according to exchange data. Some concern also came as report stated that Union Commerce Minister Piyush Goyal has stressed the need to manufacture high-quality products, saying without this approach it is going to be very difficult to make India truly competitive. Key gauges extended losses and were deeply in the red in late afternoon deals, even as the government data showed India’s merchandise export growth turned positive for the first time in three months. India’s merchandise exports in September slightly rose to $34.58 billion against $34.41 billion a year ago. Imports increased by 1.6 per cent to $55.36 billion in September compared to $54.49 billion in the year-ago period. Traders took note of report that credit rating agency ICRA has projected the combined capital spending of a sample of 13 major state governments to expand by 13% to Rs 6.5 trillion in FY25. However, this entails a miss, relative to the FY25 Budget Estimate (BE) of Rs 7.2 trillion, following a dull start to the capex in the initial months of this fiscal as well as the anticipated undershooting in states’ revenues. Finally, the BSE Sensex declined 494.75 points or 0.61% to 81,006.61, and the CNX Nifty was down by 221.45 points or 0.89% to 24,749.85.