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Indian markets ended flat on Tuesday after exhibiting volatility in intra-day deals as investors remained nervous ahead of the US Fed's monetary policy decision. Today, domestic indices are likely to get positive start even though markets elsewhere in Asia are subdued this morning ahead of the US Fed's rate decision later tonight. Sentiments will get a boost as the International Monetary Fund (IMF) raised the FY24 economic growth forecast for India by 20 basis points to 6.1 per cent, citing the country’s stronger-than-expected growth momentum in the March quarter of FY23. Some support will come with foreign fund inflows. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) bought shares worth Rs 1,088.76 crore on July 25. Traders may take note of minister of state for finance Pankaj Chaudhary’s statement that India’s general government debt moderated to 80.9% of the Gross Domestic Product (GDP) in 2022-23 from 83.3% in 2021-22. However, upside may remain limited amid rise in crude oil prices overnight coupled with monthly F&O expiry tomorrow. There will be some buzz in pharma stocks as credit rating agency ICRA projected steady growth for the Indian pharmaceutical industry, despite headwinds and regulatory challenges. According to its report, the revenues of ICRA’s sample set of 25 Indian companies (which account for 60 per cent of the overall domestic pharma industry) are expected to grow by 7-9 per cent in FY24, following a YoY growth of 10 per cent in FY23. Banking stocks will be in focus as deputy governor Rajeshwar Rao said the Reserve Bank of India will soon issue guidance to banks for the identification of risks to their credit portfolio from climate-related issues. There will be some reaction in OMCs stocks as Crisil Ratings in a research report said that oil marketing companies (OMCs) may see operating profit rebound to Rs 1 trillion in the current financial year of 2023-24 (FY24), rising by more than three-times from FY23's low of Rs 33,000 crore. Meanwhile, Axis Bank, Bharat Petroleum Corporation, Cipla, Colgate-Palmolive (India), Deepak Fertilisers & Petrochemicals Corporation, Dr Reddy's, PNB, Shree Cement, Tech Mahindra, Bajaj Finance, Aditya Birla Sun Life AMC, TCPL and REC, among others to report their Q1 results later in the day.

The US markets ended higher on Tuesday as investors parsed a batch of corporate earnings from major technology names and geared up for Wednesday’s interest rate policy decision. Asian markets are trading mixed on Wednesday as investors brace for the U.S. Federal Reserve’s rate decision.

Back home, Indian equity benchmarks swung between gains and losses and settled flat on Tuesday as investors traded cautiously, awaiting cues from the US Federal Reserve's policy stance. Elevated level of crude oil prices also weighed on the investor sentiment. Markets made a positive start but soon turned volatile amid foreign fund outflows. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 82.96 crore on July 24, 2023. Traders also were cautious with a private report that the recent rise in inflation has prompted Indian investors to push back rate cut expectations by at least a quarter to the middle of 2024, with a sustained rise in prices likely to prompt a further repricing. Some concern also came with a private report stating that Indian fintech start-ups raised a total of $1.4 billion in the first half (H1) of 2023, a massive year-on-year (YoY) drop of 67 per cent from $4.3 billion raised in the same period last year. However, traders got some support as British Parliamentarian Lord Karan Bilimoria has predicted that India will become the world's largest economy by 2060. He said India has overtaken the United Kingdom and it's now the fifth largest economy in the world. Traders also took a note of the commerce ministry’s statement that India and the UK have concluded the 11th round of negotiations for a proposed free trade agreement (FTA). India and the UK are working to iron out differences on issues like intellectual property rights (IPRs) and rules of origin under the agreement, negotiations for which were started in January 2021. Meanwhile, the Securities and Exchange Board of India (Sebi) is working on an ambitious plan to settle secondary market trades on a real-time basis. Finally, the BSE Sensex fell 29.07 points or 0.04% to 66,355.71 and the CNX Nifty was up by 8.25 points or 0.04% to 19,680.60.

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