Markets likely to get cautious start tracking mixed cues from global peers

Indian markets settled in positive territory with marginal gains on Tuesday as sharp sell-off in the dying hours of trade dragged the markets lower from intra-day high levels amid escalating geopolitical tensions. Markets remained closed for trading on Wednesday, November 20, on account of voting for state elections in Maharashtra. Today, markets are likely to get cautious start tracking mixed cues from global peers. Investors will be keeping close eye on further developments in the escalating conflict between Russia and Ukraine. Foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) extended their selling as they sold equities of Rs 3,411 crore worth on November 19. Traders will be concerned as domestic rating agency Icra said India's real GDP growth for the September quarter is likely to decline to 6.5 per cent due to heavy rains and weaker corporate performance. There will be some cautiousness as Economic Affairs Secretary Ajay Seth said India’s economic growth may have slowed in the September quarter, but overall, there is not much downside risk to 6.5-7 per cent growth in the current fiscal year. However, some support may come as think tank GTRI said India is set for a major change in its export trends, with outbound shipments of the services sectors expected to overtake merchandise exports by 2030 and touch $618 billion. Traders may take note of the Reserve Bank Bulletin stating that private consumption is back driven by festive spending, and the medium-term economic outlook remains bullish as the innate strength of the macro-fundamentals reasserts itself. There will be some buzz in the solar industry stocks as a report by the International Solar Alliance (ISA) said solar energy generation costs are likely to drop by 40-60 per cent by 2050, driven by increasing demand and scalability. Metal stocks will be in focus as Acuite Ratings & Research in its recent report said that the annual capacity of India’s steel industry will increase by 20 million tons between the financial year (FY) 2025-27. The report gives a positive outlook for the Indian steel industry in the medium to long term. There will be some reaction in insurance industry stocks with a private report that India’s insurance sector is set to witness remarkable growth, with its Assets Under Management (AUM) projected to surge to $11 trillion by 2047 from $0.7 trillion in 2023. Paper industry stocks will be in limelight as Indian Paper Manufacturers Association (IPMA) said paper and paperboard imports rose by 3.5 per cent to 992,000 tonnes in the April-September period of 2024-25, driven by a sharp rise in shipments from China. Meanwhile, Zinka Logistics IPO will list on the bourses.

The US markets ended mostly in green with limited gains on Wednesday as investors worried about escalating Russia-Ukraine tensions and weak results from Target, while awaiting earnings from megacap Nvidia. Asian markets are trading mixed on Thursday as investors closely monitored regional tech shares after Nvidia's better-than-expected earnings report.

Back home, Indian equity benchmarks witnessed a sudden fall and erased majority of their gains in the final hour of trading but managed to end on a positive note on Tuesday led by gains in Realty and Auto stocks. Markets opened on a positive note and witnessed a sharp surge during the first half of the trading session as traders took encouragement with the National Sample Survey Office (NSSO) stating that the unemployment rate for people aged 15 years and above in urban areas dipped to 6.4 per cent in the July-September quarter. Joblessness, or unemployment rate, is defined as the percentage of unemployed people in the labour force. The unemployment rate in the September quarter of FY24 was 6.6 per cent. Some support also came as a report by CRISIL stated that the tariff hikes proposed by Donald Trump may pose threat to India’s exports but the country’s surplus in services trade and robust remittances flow may provide comfort. Markets extended their gains in afternoon deals, taking support from reports that the finance ministry tweaked norms for capital restructuring by central public sector enterprises (CPSEs) and introduced flexibilities for them to better add to their value creation strategy. Adding more optimism among traders, industry chamber CII stated that the government initiatives such as Make in India and production linked incentive schemes for different sectors are helping attract foreign investors to set up bases in India. In a letter to Commerce and Industry Minister Piyush Goyal, CII Director General Chandrajit Banerjee said that the government's increased investments in infrastructure such as roads, railways and ports are making the domestic industry more competitive. However, rising tensions between Russia and Ukraine dampened market sentiment in the final hour of trading, causing the Sensex and Nifty to retreat sharply from day's highs. Besides, investors booked profit amidst consistent FII selling and weak Q2 earnings. Profit booking was also seen ahead of the upcoming Maharashtra state election. Finally, the BSE Sensex rose 239.37 points or 0.31% to 77,578.38, and the CNX Nifty was up by 64.70 points or 0.28% to 23,518.50.