Markets likely to get slightly positive start tracking gains in Asian counterparts

Indian markets extended their bear run into fifth straight session on Friday as foreign investors' selling spree and underwhelming September quarter results, and valuation concerns hit sentiment. Today, markets are likely to get slightly positive start tracking gains in Asian counterparts. Traders may take note of report that Reserve Bank of India (RBI) Governor Shaktikanta Das pointed out that institutions like the International Monetary Fund (IMF) and the World Bank need to extend greater access to resources and provide emerging economies with a more prominent role in decision-making processes. Besides, the income tax department has extended the deadline for filing income tax returns by corporates by 15 days till November 15 for assessment year 2024-25. However, there may be some cautiousness amid a new headwind after Israel hit major oil exporter Iran. Traders will be concerned amid foreign fund outflows. Foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities. Also, citing growth moderation in the June quarter of FY25 on account of sharp contraction in net exports as well as government consumption due to the model code of conduct, New Delhi-based think tank National Institute of Public Finance and Policy (NIPFP), during its mid-year review, revised downwards its growth forecast for India to 6.9-7.1 per cent. Its earlier estimate of 7.1-7.4 per cent was given during the April review. Moreover, India’s foreign exchange reserves slumped for third straight week, after having scaled an all-time high early this month. OMCs will be in focus as Crisil Ratings reported oil marketing companies (OMCs) are expected to see a drop in operating profit to $12-14 per barrel in fiscal 2025 from $20 per barrel last fiscal. There will be some reaction in oil stocks as S&P Global Commodity Insights said demand for oil products in India through the October-December quarter is expected to get a boost from festivals, agricultural activities, recovering from a few months of subdued consumption because of excessive rains. Sugar stocks will be in limelight with report that the food ministry has estimated sugar production at 33 million tonne (MT) for 2024-25 sugar season (Oct-Sept), which would be adequate to meet domestic annual consumption of 29 MT as well as 4.5 MT required for ethanol production. Meanwhile, investors will be eyeing earnings from many companies including Sun Pharmaceutical, Bharti Airtel, Punjab National Bank, Adani Power, BHEL and Ambuja Cements, fore more directional cues.

The US markets ended mostly lower on Friday amid uncertainty around who would win the US election. Asian markets are trading mostly in green on Monday after the country’s Liberal Democratic Party lost its majority in Japan’s lower house following elections on Sunday.

Back home, Indian equity benchmarks ended lower for the fifth session in a row on Friday due to widespread selling pressure tracking muted earnings growth and global uncertainties. Markets opened flat but quickly slid into negative territory, amid massive foreign capital outflows. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 5,062.45 crore on Thursday, according to exchange data. Traders were anxious as rating agency CRISIL stated that the revenue growth of Indian companies for the July-September quarter is estimated to be 5-7 per cent year-on-year (Y-o-Y), marking the slowest growth in 16 quarters. Some concern also came as Union Finance Minister Nirmala Sitharaman has stressed that job creation is the most critical issue worldwide, particularly given the persistent economic challenges and rapid technological advancements that are reshaping the labor market. Markets continued downward trajectory in late afternoon session as sentiments remained down-beat with ratings agency ICRA’s report that the slew of regulatory measures and tighter funding conditions in the domestic markets to result in a steady slowdown in credit growth for the lenders, i.e. banks and non-bank financial companies (NBFCs). It estimates the incremental bank credit growth to slow down to Rs. 19.0-20.5 trillion in FY2025, which will translate into a YoY growth of around 12%, compared to Rs. 22.3 trillion in FY2024 (YoY growth of 16.3%). However, a slight bounce in the last hour helped trim some losses. Traders took some support with the report that government has doubled the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) to Rs 20 lakh to promote entrepreneurship in the country. This increase aspires to further the overall objective of the Mudra Scheme which is funding the unfunded. This enhancement is specifically beneficial to upcoming entrepreneurs facilitating their growth and expansion. The move is in alignment with the government's commitment in fostering a robust entrepreneurial ecosystem. Finally, the BSE Sensex fell 662.87 points or 0.83% to 79,402.29, and the CNX Nifty was down by 218.60 points or 0.90% to 24,180.80.