Markets likely to open in green amid firm global cues; manufacturing PMI eyed

Indian markets bounced back on Friday after witnessing sharp fall in previous session led by buying in heavyweights and across sectors, barring realty and PSU banks. Today, markets are likely to open in green tracking firm global cues. Sentiments will get boost as the government data showed that foreign direct investment in India rose by 45% year-on-year to $29.79 billion in April-September this fiscal on healthy inflows in services, computer, telecom and pharma sectors. FDI inflows were at $20.5 billion in April-September 2023-24. Some support will come as the government data showed that the total gross Goods and Services Tax (GST) revenue grew 8.5% to over Rs 1.82 lakh crore in November as compared to Rs 1.68 lakh crore in the same month a year ago. Some optimism will come as Reserve Bank of India (RBI) data showed that India services exports rose for the second month in a row, increasing 22.3% in October to $34.3 billion. However, upside may remain in check after India's September quarter Gross Domestic Product (GDP) print came in widely lower than market expectations, and US President-elect Donalt Trump threatened 100% tariffs on BRICS nations if they act to weaken the dollar's dominance in international trade. Apart from that, investors would be awaiting PMI readings for November, with data for the manufacturing sectors scheduled for release later in the day. Traders may be concerned as Crisil expects GDP growth to slow to 6.8% this financial year 2024-25. It said the growth is weighed down by high interest rates and low fiscal impulse. Some pessimism may come as India’s foreign exchange reserves have declined $48 billion in the past two months (since September 27) as the Reserve Bank of India (RBI) intervened heavily in the forex market to protect the domestic currency from depreciating sharply against the dollar. There may be some cautiousness as the government data showed that India's fiscal deficit for the first seven months of this fiscal year through October stood at 7.51 lakh crore rupees, or 46.5% of annual estimates. The fiscal deficit was tad wider than 45% reported in the comparable year-earlier period. Traders may take note of the government data showing that the output of eight key infrastructure sectors expanded by 3.1% in October 2024, sharply down from a 12.7% growth registered in the same month last year. On a monthly basis, the production growth of these sectors was higher than the 2.4% expansion recorded in September 2024. Banking stocks will be in focus as the RBI data showed that banks' credit to industry grew by 8% in October 2024 compared to 4.8% in the year-ago period. The Reserve Bank data also showed that credit to agriculture and allied activities registered a growth of 15.5% year-on-year (y-o-y) in October 2024, compared to 17.4% seen in the same month of last year. There will be some reaction in coal industry stocks as India’s overall coal production reached 90.62 million tonnes (MT) (Provisional) in November this year, compared to 84.52 MT in the same month last year, marking a 7.20 per cent growth. Aviation stocks will be in limelight with report that Jet fuel, or aviation turbine fuel (ATF), price was hiked by 1.45% and rates of commercial LPG used in hotels and restaurants increased by Rs 16.5 per 19-kg cylinder in the monthly revision done in line with international oil price trends.

The US markets ended higher on Friday with Wall Street crowning November with its biggest monthly gain in a year on post-election growth hopes. Asian markets are trading mostly in green on Monday as investors await key economic data from China, Japan.

Back home, Indian equity benchmarks rebounded on Friday, surging nearly one per cent each, amid buying in frontline stocks Bharti Airtel and Sun Pharma. After making a cautious start, key gauges gained traction as traders took support with Commerce and Industry Minister Piyush Goyal’s statement that President-elect Donald Trump is a ‘friend of India’ and India-US friendship will only continue to blossom and grow further. The minister also said he does not foresee any problems in the Indo-US partnership, and exuded confidence that it would further strengthen with the new administration taking over in Washington. Traders overlooked exchange data showing that Foreign Institutional Investors (FIIs) offloaded Rs 11,756.25 crore in the capital markets on net basis on Thursday. Markets experienced considerable buying demand in late morning deals and concluded the day on a high note as sentiments got up-beat amid a private report stating that revenue collections of states, as percentage of their gross domestic product, are budgeted to beat the pre-Covid level in 2024-25 on the back of projected improvement in their own revenue streams as well as central transfers. Some solace also came with the Ministry of Petroleum & Natural Gas’ latest notification stating that government has been taking various steps to ensure fair and reasonable prices for consumers. Domestically, Petrol and Diesel prices have come down from Rs 110.04 and Rs 98.42 per litre in November 2021 to Rs 94.77 and Rs 87.67 per litre respectively (as on November 18, 2024, Delhi prices) as a result of reduction of Central Excise duty by the Central Government by a total of Rs 13/litre and Rs 16/litre on petrol and diesel respectively in two tranches in November 2021 and May 2022, which was fully passed on to consumers. Finally, the BSE Sensex rose 759.05 points or 0.96% to 79,802.79, and the CNX Nifty was up by 216.95 points or 0.91% to 24,131.10.