Markets likely to get flat-to-positive start on Friday

Indian markets ended lower with cut of around a percent each on Thursday as investors await US Federal Reserve Chair Jerome Powell’s remarks on the future direction of the rate trajectory. Today, markets are likely to get flat-to-positive start as investors will react to the US Federal Reserve cutting interest rates along expected lines, a day after Republican candidate Donald Trump emerged as the next president of the US. Some support will come as Piyush Goyal, Union Minister of Commerce and Industry, commended EEPC India’s target to reach $300 billion in engineering exports by 2030, calling it a bold testament to the courage and conviction of new India. Goyal highlighted the crucial role of the engineering sector in realizing India’s vision of Viksit Bharat and emphasized the government’s ongoing efforts to streamline regulations, promote ease of doing business, and support sustainable, high-quality manufacturing. Traders may take note of report that Brazil has shown potential to become a major supplier of Urad and Tur pulses for India, with Urad imports from Brazil rising dramatically from 4,102 metric tons in 2023 to over 22,000 metric tons by October 2024. There will be some buzz in power stock as a private report projected robust growth for India’s power sector, anticipating a compound annual growth rate (CAGR) of over 7 per cent in electricity demand from FY24 to FY27. E-commerce stocks will be in focus with a private report that the Enforcement Directorate (ED) launched a significant crackdown on vendors selling through major e-commerce platforms, such as Amazon and Flipkart, amidst a FEMA-related investigation. These searches are part of a comprehensive probe into financial transactions by certain preferred vendors and sellers on these platforms. There will be some reaction in textile stocks as the textile industry leaders discussed the increasing importance of the European Union (EU) market for India’s textile and apparel exports during a workshop organised by the Confederation of Indian Textile Industry (CITI). Several prominent companies are set to announce their Q2 results for the current fiscal on Friday, with key firms including Aarti Industries, Ashok Leyland, Bajaj Hindusthan Sugar, Cholamandalam Financial, ESAB India, and Fortis Healthcare. Other notable companies in focus are India Cements, MRF, Motherson Sumi, Info Edge, State Bank of India, Tata Motors, and Welspun Corp.

The US markets ended mostly in green on Thursday after the Federal Reserve cut interest rates and as investors processed a second Donald Trump presidency. Asian markets are trading higher on Friday tracking overnight gains on Wall Street.

Back home, Indian equity benchmarks took a breather on Thursday after two days of strong gains, with profit booking weighing on the markets ahead of a crucial monetary policy meeting of the U.S. Federal Reserve. After making a slightly positive start, markets fell sharply and remained under pressure throughout the session, as traders turned cautious with RBI Governor Shaktikanta Das’ statement that capital expenditure spending of the centre and states are picking up but high subsidy outgo is a concern. He said subsidy outgo was very high and government expenditure in the first quarter is pulling down the GDP numbers. Some concern also came as SBI report stated that they see Q2 real GDP growth slowing down further to 6.5 per cent in the September quarter of this fiscal year. Amid concerns over the country's economic growth rate and if it is slowing down, it said they expect FY25 growth to come closer to 7 per cent. Markets continued to reel under pressure in late afternoon session amid unabated foreign fund outflows. Foreign institutional investors (FIIs) offloaded equities worth Rs 4,445.59 crore on Wednesday, according to exchange data. Traders overlooked a private report stating that urban and rural markets have shown a sequential recovery in consumer demand and rural areas continue to surpass urban areas in volume growth across most regions of India. Separately, highlighting the Government’s efforts to reduce compliance burdens and decriminalise laws to promote ease of doing business, Minister of Commerce and Industry, Piyush Goyal has emphasized the need to transform India into a powerhouse of engineering exports as the country advances towards the Viksit Bharat goal. Finally, the BSE Sensex fell 836.34 points or 1.04% to 79,541.79, and the CNX Nifty was down by 284.70 points or 1.16% to 24,199.35.