IGI Logo

Indian markets finished a volatile session in the red for a second straight session on Monday, due to weakness in financial, oil & gas and FMCG amid lingering concerns over interest rates and inflation. Today, markets are likely to get flat-to-positive start amid mixed cues from Asian counterparts. Traders will be taking engorgement as Credit rating agency Acuite Ratings and Research reiterated India's gross domestic product (GDP) growth estimate for FY23 at 7 per cent. It also anticipates the economic growth trajectory in FY24 to slip to 6 per cent, which would still make India one of the highest growth economies in the world. Some support will come as Union Finance Minister Nirmala Sitharaman said that the government is taking a lot of steps to control inflation and will continue to focus on it. For instance, in the case of pulses, the government is encouraging farmers to grow pulses to boost domestic production and has also reduced the import duty on some of the pulses to improve local availability. However, foreign fund outflows likely to dampen sentiments in domestic markets. Foreign institutional investors net offloaded Indian equities to the tune of Rs 159 crore on February 20 - a second straight day of net outflow for Dalal Street, according to provisional exchange data.  Traders may be concerned as Retail inflation for farm and rural workers rose to 6.85 per cent and 6.88 per cent, respectively, in January, mainly due to higher prices of certain food items. Besides, the latest payroll data released by the Employee Provident Fund Organisation (EPFO) showed fresh formal job creation declined sequentially in December and remained below the 1 million mark for the third consecutive month, signaling pressure in the employment market. Sugar stocks will be in focus as the Indian Sugar Mills Association said Indian mills have produced 25.4 million tonnes of sugar since the current season began on Oct. 1, up 5.39% year on year. There will be some reaction in aviation industry stocks with private report that domestic airlines flew 12.54 million passengers in January this year, witnessing a near two-fold rise compared to the numbers in January 2022. Airlines carried 6.4 million passengers last January.

The US markets were closed on Monday for Washington's Birthday. Asian markets are trading mixed on Tuesday as investors reacted to weak purchasing manager index reports from Japan and Australia and kept a wary eye on the latest geopolitical developments.

Back home, a tight grip of bears over the Dalal Street pulled Indian equity benchmarks to end near their intraday low points, amid worries that the U.S. Fed would keep interest rates higher for longer while rising concerns after North Korea fired more ballistic missiles. After a cautious start of the day, markets managed to keep their heads above water during morning deals, as traders took support with Federation of Indian Export Organisations’ (FIEO) statement that India's exports are expected to grow by 3-5 per cent to $435-445 billion in this fiscal. However, in noon deals, indices turned negative and witnessed a sharp fall, amid weak cues from European markets along with heavy selling at oil & gas and banking counters. Sentiments got hit amid a private report stating that India’s economic activity cooled off at the start of the year as higher borrowing costs tempered demand at home and abroad, signaling more pain ahead as the global economy slows down. Besides, traders took note of a report that the Reserve Bank of India (RBI) has predicted that 2023 would probably be characterised by a milder global slowdown than anticipated earlier, but added that the trajectory remains unpredictable. Finally, the BSE Sensex fell 311.03 points or 0.51% to 60,607.02 and the CNX Nifty was down by 99.60 points or 0.56% to 17,844.60.

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