Markets likely to get flat-to-positive start

Indian markets extended their losing streak to third day and closed a choppy trading session in red terrain as investors booked profits in auto, pharma and capital goods shares amid continued FPI outflows. Today, markets are likely to get flat-to-positive start as investors will closely monitor quarterly earnings reports alongside manufacturing, composite, and services Flash PMI data for October. Some support will come as minutes of the Reserve Bank of India (RBI) monetary policy committee's latest meeting stated that India's food inflation expected to ease by Q4 of fiscal year 2024-25 on better kharif arrivals and rising prospects of a good rabi season, despite a significant pick-up in September inflation print. It added that the outlook for food inflation is becoming more favourable with improvement in kharif and rabi season prospects. Traders may take note of Union Finance Minister Nirmala Sitharaman’s statement that India wants to enhance its influence in the world as one in every six persons is Indian and the world cannot ignore India's economy. However, upside may remain in check amid a decline on Wall Street ahead of US presidential elections. Meanwhile, India has imposed anti-dumping duty on five Chinese goods, including glass mirror and cellophane transparent film, for five years to guard domestic players from cheap imports from the neighbouring country. These duties were imposed as these products -- isopropyl alcohol, sulphur black, cellophane transparent film, thermoplastic polyurethane, unframed glass mirror -- were exported to India from China at below normal prices. Real estate industry stocks will be in focus after a report noted that India’s real estate market is experiencing a significant surge, as the festive season approaches, propelled by a combination of large-scale infrastructure projects, buyer-friendly incentives, and an increasing appetite for premium properties. There will be some reaction in road industry stocks as Union minister Nitin Gadkari said the government has decided to double the defect liability period to 10 years for contractors of engineering, procurement and construction (EPC) projects. Currently, under EPC projects, the responsibility for maintenance of national highways lies with the government after the defect liability period (5 years) is over. Ceramic industry stocks will be in limelight with report that the Indian ceramic tiles industry finds itself at a critical juncture, as a recent report by ICRA reveals contrasting trends in the domestic and export markets.

The US markets ended lower on Wednesday driven by losses in consumer discretionary, technology and communication services stocks. Asian markets are trading mixed on Thursday after the overnight decline in US stocks on Wall Street.

Back home, Indian equity benchmarks ended marginally in red on Wednesday as investor mindset turned gloomy with the tepid earnings and a knee jerk reaction from FIIs, which dragged the market sentiment. Foreign institutional investors (FIIs) offloaded shares worth Rs 3,978.61 crore on Tuesday, according to exchange data. After making a cautious start, key gauges managed to keep their heads above water for most part of the day as traders took some support with Reserve Bank of India deputy governor Michael Debabrata Patra’s statement that India’s GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend. Some support came as Minister of Petroleum and Natural Gas of India Hardeep Singh Puri hopes that global oil prices will come down despite geopolitical tensions as more supplies are coming into the market. Sentiments remained positive in afternoon deals, as Finance Minister Nirmala Sitharaman emphasised the significant strides India has made in reducing inequality over the last decade. The minister noted that India’s policies have been pivotal in bridging inequality across various segments of society, with a comprehensive approach to financial inclusion, poverty alleviation, and infrastructure development. However, markets erased all of their initial gains in late afternoon deals and ended with minor cuts as traders got cautious after the International Monetary Fund (IMF) kept its growth forecasts for India unchanged at 7 per cent and 6.5 per cent for FY25 and FY26, respectively. It held that pent up demand accumulated during the pandemic has been exhausted as the economy “reconnects” with its potential growth. Some concern came with a labour ministry stating that retail inflation for farm workers and rural labourers increased to 6.36 per cent and 6.39 per cent, respectively, in September from 5.96 per cent and 6.08 per cent in August this year. Finally, the BSE Sensex fell 138.74 points or 0.17% to 80,081.98, and the CNX Nifty was down by 36.60 points or 0.15% to 24,435.50.