IGI Logo

Indian markets ended higher for the third consecutive session on Tuesday with healthy buying in FMCG, IT, pharma, realty, metals, and oil and gas stocks. Today, domestic equity indices are likely to get flat-to-positive start amid weakness in global markets. Some support will come as Union Finance Minister Nirmala Sitharaman said there has been a threefold increase in income tax filing in each bracket, an indication of significant improvement in the formalisation of the economy. She said each tax bracket, that is, the tax slabs, has seen a minimum threefold increase in tax filing. Some even achieved a nearly fourfold surge. More optimism will come as the RBI Deputy Governor said India was in a sweet spot to grow robustly, despite global turmoil and monsoon risks to growth, and to do so, developing credit markets was essential. Traders may take note of RBI Governor Shaktikanta Das’ statement that the Reserve Bank of India (RBI) is determined to bringing down inflation to 4 per cent and will remain watchful of risks as more frequent global supply shocks can have profound implications on the management of the price situation. However, some cautiousness may come as S&P Global Ratings Economist (Asia Pacific) Vishrut Rana said inflation in India is likely to remain elevated in the near terms but government policies will prevent it from rising further. In July, the consumer price index based retail inflation spiked to 15-month high of 7.44 per cent in July, with specific food commodities mainly driving the increase. Also, foreign fund outflows may dent domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed foreign institutional investors (FII) sold shares worth Rs 1,725.11 crore on September 5. There will be some buzz in shipping sector stocks as the union government is looking to make India as the refuelling hub of green hydrogen, ammonia and methanol for the shipping sector. The union minister for power, new and renewable energy R K Singh said India will provide these green fuels at the cheapest rates. Banking stocks will be in focus with RBI Governor Shaktikanta Das’ statement that ‘Our banking system remains resilient and healthy with improved capital ratios, asset quality and profitability’.

The US markets ended lower on Tuesday as Treasury yields rose along with oil prices and investors assessed prospects for the Federal Reserve's interest rate path. Asian markets are trading mostly in red on Wednesday after Saudi Arabia and Russia extended voluntary oil production cuts to the end of the year.

Back home, Indian equity benchmarks closed higher for the third straight day on Tuesday on gains in market heavyweights Sun Pharma, Titan Company and ITC. Indian bourses started the day on a positive note as traders took support with report that rains forecast for swathes of India this month should limit the damage to crops after a delayed monsoon and parched August, leaving the world’s most populous nation with sufficient supplies. Traders were also getting some encouragement on report that India is on the path to become a solid global player due to robust financial regulations. India was in a sweet spot to grow robustly, despite global turmoil and monsoon risks to growth, and to do so, developing credit markets was essential. However, key gauges trimmed some of their gains in afternoon session amid a bearish trend in global equities. Some concern also came as India’s services sector growth eased in the month of August, but remained among the best in 13 years, with a series-record increase in new export business inducing another sharp expansion in total sales.  As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index fell at 60.1 in August from 62.3 in July. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- eased to 60.9 in August as against 61.9 in July. However, markets regained traction in final hour of trade and settled higher. Finally, the BSE Sensex rose 152.12 points or 0.23% to 65,780.26 and the CNX Nifty was up by 46.10 points or 0.24% to 19,574.90.

Above views are of the author and not of the website kindly read disclaimer