Markets likely to start holiday shortened week on cautious note amid mixed global cues

Indian markets ended marginally lower on Thursday, extending losses for a sixth straight session as foreign investors continued selling domestic equities. Stock markets remained closed for trading on Friday, November 15, 2024, on account of Guru Nanak Jayanti. Today, start of the holiday shortened week is likely to be cautious amid mixed cues from Asian counterparts. The markets will be closed on Wednesday, November 20, 2024, in observance of the Maharashtra Legislative Assembly General Election. Sustain foreign fund outflows likely to dent sentiments. Foreign Institutional Investors (FIIs) sold shares worth Rs 1,849.87 crore on November 14. There will be some cautiousness as Reserve Bank Governor Shaktikanta Das said that the central bank has ensured a soft landing after having faced with various headwinds, but risks of inflation coming back and growth slowing down do remain. Besides, India’s foreign exchange reserves declined for the sixth straight week, mainly due to the Reserve Bank of India’s intervention in the foreign exchange market as the rupee came under pressure from sustained foreign investment outflows. However, some respite may come later in the day as a recent report by Moody’s stated that India’s economy is in a sweet spot from a macroeconomic standpoint, blending strong growth with easing inflation. The ratings agency projected India’s Gross Domestic Product (GDP) to grow by 7.2% in 2024, followed by 6.6% in 2025 and 6.5% in 2026. Some support may come as India’s exports surged by over 19 per cent in October. As per the Ministry of Commerce and Industry, data merchandise exports were up by over 17 per cent while services exports were up by over 21 per cent. Auto stocks will be in focus as the Federation of Automobile Dealers Associations (FADA) said the automobile retail demand during this year’s festive season witnessed a surge with sales growing at the rate of 11.76 per cent over last year’s 38.37 lakh units. There will be some reaction in stocks related to jewellery as the Gem and Jewellery Export Promotion Council (GJEPC) said India's gems and jewellery exports grew by 9.18 per cent to $2,998.04 million (Rs 25,194.41 crore) in October due to revival in demand for cut and polished diamond. Edible oil industry stocks will be in limelight as industry body SEA said during the April-October period of the 2024-25 fiscal year, the overall oilmeal exports declined 7 per cent to 23.88 lakh tonnes against 25.66 lakh tonnes in the corresponding period last year, primarily due to lower shipments of rapeseed and castorseed meals. Meanwhile, investors back home will react to Q2 numbers from top companies like Hero MotoCorp, Grasim Industries and Nazara Tech among others. Moreover, Neelam Linens and Garments (India) IPO (SME) will debut on stock exchanges.  

The US markets ended in red on Friday on concerns about slower interest-rate cuts and as investors reacted to cabinet picks by U.S. President-elect Donald Trump. Asian markets are trading mixed on Monday tracking weakness on Wall Street.

Back home, Indian equity benchmarks continued their downward trend to end marginally lower on Thursday amid disappointing quarterly results and soaring inflation. After making a cautious start, markets traded positive for the first couple of hours as traders took support with S&P Global Ratings’ statement that supply capacity in India is continuing to expand pretty quickly which will help contain inflationary pressure. S&P Senior Economist Asia Pacific Vishrut Rana has said the central bank's monetary policy and inflation target remains credible and the Reserve Bank of India (RBI) should be able to anchor inflationary expectations. Some support came with oil minister Hardeep Singh Puri’s statement that Donald Trump’s return to the White House will help bring more energy supplies to the global market, putting pressure on prices, benefitting India. However, markets erased initial gains to trade lower in late morning deals as data showed inflation based on wholesale price index (WPI) in India jumped in the month of October 2024 to 2.36% from 1.84% in September 2024, due to increase in prices of food articles, crude petroleum & natural gas and electricity. Markets continued to trade marginally lower in late afternoon deals, as some concern came with a WTO report stating that there has been an increase in the trade restrictive measures introduced by G20 member countries during mid-October 2023 to mid-October 2024. It said that during the review period, G20 economies introduced 91 new trade-restrictive and 141 trade-facilitating measures on goods, both of which mostly dealt with imports. Besides, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,502.58 crore on Wednesday, according to exchange data. Meanwhile, India’s Chief Economic Advisor (CEA) V. Anantha Nageswaran emphasised that India needs to enhance its investment appeal regardless of political changes in the United States, focusing on internal economic reforms and scaling up enterprise growth. He highlighted key areas for India’s economic strategy, including deregulation, support for small and medium enterprises (SMEs), and a balanced approach to market volatility. Finally, the BSE Sensex fell 110.64 points or 0.14% to 77,580.31, and the CNX Nifty was down by 26.35 points or 0.11% to 23,532.70.