Markets likely to get positive start tracking positive cues from global peers

Indian markets ended flat in a volatile trade on Tuesday, as investors preferred to stay on the sidelines awaiting further triggers amid persistent foreign fund outflows. Stock markets remained closed on Wednesday due to the Christmas holiday. Today, markets are likely to get positive start tracking positive cues from global peers. Some support will come with a private report that India’s gross domestic product (GDP) growth, which plunged to 5.4 per cent in the July–September quarter, is making a comeback in the October–December period, according to high-frequency indicators cited in the State of the Economy report by the Reserve Bank of India (RBI). Traders may take note of report that the government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26. However, there may be some cautiousness as foreign institutional investors remained net sellers in the cash market in the previous trade session and offloaded shares worth Rs 2,454 crore. Trader may be concerned as net foreign direct investment (FDI) into the country has slowed considerably, with latest data released by the Reserve Bank of India (RBI) in its December bulletin showing that it decelerated to $2.1 billion during April-October 2024 from $7.7 billion a year ago, majorly due to the rise in repatriation and net outward FDI. Metal stocks will be in focus with report that the steel ministry has urged the Ministry of Finance to double the basic Customs duty on imported finished steel products to 15 per cent from the current 7.5 per cent in the upcoming Union Budget for 2025–26. There will be some reaction in insurance industry stocks as the annual report of Insurance Regulatory and Development Authority of India (Irdai) has reported a worrying dip in insurance penetration, which fell to 2.8 per cent in the 2023-24 financial year, down from 3.7 per cent the previous year. Cement industry stocks will be in limelight with a private report that the Indian cement industry, witnessing a consolidation and heightened rivalry between two corporate houses snapping smaller players, pins its hope on 2025 for an improvement in sales realisation, higher margins and acceleration in demand, expecting around 8 per cent sales growth helped by an increased government spendings on big-ticket infra projects.

The US markets ended higher on Tuesday topping off a global share rally in thin trade as markets closed early on Christmas Eve. Asian markets are trading mixed on Thursday in thin holiday trade as Bank of Japan Governor Kazuo Ueda avoided giving a clear signal that he might raise interest rates next month.

Back home, Indian equity benchmarks ended marginally lower in the volatile session on Tuesday dragged by Metal, Power and Utilities stocks. After making slightly positive start, key indices turned volatile as traders seemed reluctant to make more significant moves ahead of a market holiday on Wednesday for Christmas. However, key gauges gained some traction in late morning deals as traders took support with data showing that retail inflation for farm workers and rural labourers dipped to 5.35 per cent and 5.47 per cent in November compared to 5.96 per cent and 6 per cent, respectively, in October this year. Some support also came with Union Agriculture Minister Shivraj Singh Chouhan’s statement that the Centre and state governments are working on a new scheme to help farmers transport the farm produce to other states and markets. He added the contribution of the farm sector to the country's GDP is 18 per cent, and the government is working on many areas to further strengthen the sector. Markets managed to keep their heads above water in afternoon deals, taking support from report that the government of India and the Asian Development Bank (ADB) has signed a $500 million (about Rs 4,250 crore) loan to support green and sustainable infrastructure projects aligned with the country's climate commitments. Traders took note of Saurabh Garg, secretary, Ministry of Statistics and Programme Implementation’s statement that India needs to leverage data and make data-driven decisions if it wants to achieve a higher rate of growth. However, profit booking in late afternoon deals erased all the intraday gains to close marginally lower. FII outflows also weighed on the markets. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 168.71 crore, according to exchange data. Finally, the BSE Sensex fell 67.30 points or 0.09% to 78,472.87, and the CNX Nifty was down by 25.80 points or 0.11% to 23,727.65.