Markets likely to get cautious start amid mixed showing in global markets

Indian markets extended the gains on second straight session on Tuesday with Nifty closing above 24,450, led by realty and financial stocks. Today, markets are likely to get cautious start amid a mixed showing in global markets, even as the Nasdaq Composite climbed to a record high on Wall Street overnight. The ongoing third-quarter earnings seasons, developments in West Asia, and upcoming US presidential elections are some key triggers for investors to watch. In West Asia, as per reports, at least 93 Palestinians were killed or missing and dozens wounded in an Israeli strike on a residential building in the northern Gaza town of Beit Lahiya on Tuesday. In the US, tech titans Meta Platforms and Microsoft are set to report their earnings today. Developments around elections suggest a close race between Republican Donald Trump and his Democratic rival Kamala Harris. The US gross domestic product (GDP) Q3 data will be on the radar. Domestically, investors will keep an eye out for India's manufacturing output data for September scheduled to be released today. There will be some cautiousness as Hardeep Singh Puri, Minister for Petroleum and Natural Gas said that no one can predict fuel prices because of the uncertainty that has prevailed in different parts of the world citing tensions in the Middle East. However, some support may come as oil prices edged down on Tuesday, after a 6% tumble in the previous session, on a report that Israeli Prime Minister Benjamin Netanyahu will hold a meeting for a diplomatic solution to the war in Lebanon. Traders may take note of President Droupadi Murmu’s statement that India is the fastest growing major economy and is likely to become the third largest economy soon. She said the Indian economy had been demonstrating resilience in the face of geopolitical challenges and the country's economy was likely to grow tenfold by 2047. There will be some buzz in auto stocks after Union Minister for Road Transport and Highways, Nitin Gadkari, laid out a vision to transform India into the world’s top automobile hub within the next decade. Some prominent firms set to announce their results on Wednesday for the second quarter of the current financial year include Larsen & Toubro, Tata Power, Procter & Gamble Hygiene & Health Care, Biocon, Dabur India, Aditya Birla Capital. Markets will also digest the second quarter results released by Adani Enterprises, Marico, and others. In the primary market, shares of Godavari Biorefineries will list on the bourses.

The US markets ended mostly in green on Tuesday ahead of key earnings reports this week, while Treasury yields hit multi-month highs early, with the US presidential election just a week away. Asian markets are trading mostly lower on Wednesday as traders prepare for next week’s US election and Federal Reserve rate decision.

Back home, Indian equity benchmarks recouped initial losses to end firm for the second straight session on Tuesday helped by fag-end buying in banking counters and a firm trend in global markets. Easing tensions in the Middle East and a drop in crude prices also provided some relief. After making a cautious start, key gauges fell sharply and spend most of the day under pressure amid continuous foreign fund outflows from the capital markets and largely muted earnings from corporates so far. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,228.08 crore on Monday, according to exchange data. Traders remained cautious with private report stating that the Indian economy has entered a phase of 'cyclical growth slowdown' and the Reserve Bank's estimate of 7.2 per cent GDP expansion is 'overly optimistic'. Investors also covered short positions in the beaten down banking stocks ahead of monthly F&O expiry on Thursday. However, in late afternoon session, the turnaround was seen across the sectors which supported the indices to recover all their losses to end the day with gains. Traders found solace with the finance ministry’s statement that India's economic outlook remains bright, underpinned by a stable external sector, positive farm prospects and chances of higher government spending to make up for the shortfall during the general elections but ‘underlying demand conditions bear watching’. It also said India's inflation appears largely under control despite sporadic spikes in prices of certain vegetable. Some support also came with RBI Governor Shaktikanta Das’ statement that any concern regarding a 'slowdown' in festive demand this season is outweighed by positive cues from the economy, and the macroeconomic indicators may be giving 'mixed signals. Traders took note of private report that India and Russia are accelerating efforts to establish a rupee-ruble trade mechanism, aiming to reduce reliance on the US dollar amid growing global financial complexities. The two nations are working to create a direct payment system in their respective currencies, a step that could redefine their trade relationship by fostering greater financial independence. Finally, the BSE Sensex rose 363.99 points or 0.45% to 80,369.03, and the CNX Nifty was up by 127.70 points or 0.52% to 24,466.85.