IGI Logo

Indian markets ended higher by more than two and half per cent on Tuesday. The market remained closed on Wednesday on account of Ganesh Chaturthi holiday. Today, benchmarks are likely to make flat-to-negative start of new month amid weakness in global markets. The disappointing gross domestic product (GDP) numbers likely to weigh on investors’ sentiment. India's gross domestic product (GDP) rose 13.5 per cent year-on-year in the April-June period. Though, it is the fastest annual expansion in a year, it was lower than the predictions made by the Reserve Bank of India (RBI; 16.2 per cent) and other market participants. Traders will be concerned as the data of the Department for Promotion of Industry and Internal Trade (DPIIT) showed that Foreign Direct Investment (FDI) equity inflows into India contracted by 6 per cent to USD 16.59 billion during the April-June quarter this fiscal. Some cautiousness will also came as the output of India’s eight infrastructure industries decelerated to a six-month low of 4.5 per cent year-on-year (y-o-y) in July as compared to a double-digit growth in June. More pessimism will come as the Reserve Bank data showed that India Inc's foreign direct investment in July declined over 50 per cent to $1.11 billion in July 2022. As per the RBI data, on Outward Foreign Direct Investment (OFDI), the domestic companies had invested over $2.56 billion in July 2021 in the form of equity, loan and issuances of guarantees. Besides, India’s fiscal deficit during the first four months of the ongoing financial year was at Rs 3.4 trillion or 20.5 per cent of the annual target. In April-July 2021, the Centre’s fiscal deficit was Rs 3.2 trillion or 21.3 per cent of last year’s target. However, some respite may come later in the day as Finance Secretary T V Somanathan said the government is confident that India’s real gross domestic product (GDP) growth will exceed 7 per cent in 2022-23 (FY23). This will make it the world’s fastest-growing major economy. Some support may also came as the Periodic Labour Force Survey (PLFS) results for April-June 2022 showed that the unemployment rate in urban areas fell for the fourth consecutive quarter. Meanwhile, in August, domestic equity markets garnered one of the highest foreign portfolio investor (FPI) flows since the outbreak of the pandemic in 2020, despite the US Federal Reserve standing firm on unwinding its stimulus measures to control inflation. FPIs pumped in over Rs 51,000 crore ($6.4 billion) in August, the most since December 2020. Auto industry stocks will be in focus reacting to their monthly sales numbers to be out later in the day. Besides, a private report stated that Medium and heavy commercial vehicle (M&HCV) makers were the worst impacted in the auto space in the June (Q1FY23) quarter due to a spike in raw material costs and moderating volumes. Stocks from oil & gas, aviation will be in limelight as the government hiked the windfall profit tax on the export of diesel to Rs 13.5 per litre and that on jet fuel exports to Rs 9 per litre. The levy on domestically-produced crude oil too has been increased by Rs 300 per tonne to Rs 13,300.

The US markets ended lower on Wednesday as worries about aggressive interest rate hikes from the Federal Reserve persist. Asian markets are trading mostly in red on Thursday following weak Wall Street cues.

Back home, Tuesday turned out to be a fabulous day of trade for the Indian equity benchmarks, with frontline gauges garnering gains of over two and half percent as buying interest was seen across all sectors. After the gap-up start, the benchmarks moved from strength to strength till the end and settled around the day’s high. Traders also took some encouragement with a joint survey conducted by industry body FICCI and Indian Banks' Association revealing that the economic activity in India is in recovery mode as growth seen broad basing with most sectors operating at pre-pandemic levels. The uptick in growth was despite a muted start to this year due to emergence of Omicron variant. Some support also came in with Commerce and Industry Minister Piyush Goyal’s statement that India is looking at getting duty-free access for different products identified under One District One Product (ODOP) initiative, to promote their exports . The Minister said that these products, which include gold jewellery, toys, handicrafts and handlooms, hold huge opportunities. Markets extended gains in last leg of trade which mainly helped markets to end near intraday high levels, as some support came with Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy’s statement that Indian economy's size will touch $20 trillion by 2047 provided the annual average growth is 7-7.5 percent in the next 25 years. He also said the country's annual per capita income will be over $10,000 if the country grows at an average economic growth rate of 7-7.5 percent in the next 25 years. Some optimism also came as credit rating agency Icra in its a note based on the analysis of 620 listed companies, excluding financial sector entities, has said that India Inc saw a 39 per cent jump in top lines during April-June quarter. However, it said their operating margins declined 213 basis points to 17.7 per cent due to input cost inflation. Finally, the BSE Sensex rose 1564.45 points or 2.70% to 59,537.07 and the CNX Nifty was up by 446.40 points or 2.58% to 17,759.30.