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Indian equity markets ended lower after a volatile day of trade on Tuesday. Today, markets are likely to make negative start on weak cues from global markets. Traders may be cautious as ratings agency Fitch cut the US credit rating from AAA to AA+, citing expected fiscal deterioration over the next three years. Traders may also be concerned amid foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 92.85 crore on August 1. However, some respite may come later in the day as Minister of State for Finance Pankaj Chaudhary said that the Central Government’s debt was Rs 155.6 lakh crore as on March 31, 2023. It has reduced from 61.5 per cent of GDP in 2020-21 to 57.1 per cent of GDP in FY 2022-23.  Meanwhile, Union Minister for State (Home Affairs) Nityanand Rai said 15th Finance Commission has allocated a total corpus of Rs 1,28,122.40 crore to the State Disaster Response Force (SDRF) in all States for the Award Period (2021-22 to 2025-2026). Further, some support may come as goods and services tax (GST) revenue rose 11 per cent year-on-year in July to Rs 1.65 trillion. Monthly GST collection crossed the Rs 1.6 trillion mark for the fifth time, indicating vigorous economic activity and strict anti-evasion measures employed by both central and state governments. Traders may take note of report that the government has mobilised a gross amount of Rs 5.77 lakh crore by issuing dated securities in the current financial year up to July 31, 2023. It has raised a net amount of Rs 4.18 lakh crore through the instrument in the same period.  There may be some buzz in online gaming companies related stocks as the GST Council in its meeting on Wednesday is likely to finalise the modalities for determination of supply value in online gaming and casinos for levying 28 per cent tax.

Asian markets were trading in red in early deals on Wednesday following mostly negative cues from global markets overnight. The US markets ended mostly in red on Tuesday ahead of U.S. jobs data and major companies’ earnings reports later this week. 

Back home, after swinging between gains and losses, Indian equity markets closed marginally lower in a highly volatile market on Tuesday, pressured by selling in index majors Power Grid Corporation, Bajaj Finserv and Indusind Bank amid a mixed trend in global equity markets. Markets made a positive start, as traders took support with a private report stating that the pace of credit offtake continued to be robust in June 2023, with sectors clocking year-on year (YoY) growth of between 8.1 per cent and 26.7 per cent. Some support also came with report that India is expected to receive normal rainfall in the August-September period after excess precipitation in July. However, markets erased opening gains and were trading flat with negative bias in late morning deals as traders got anxious amid foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 701.17 crore on July 31.  Lackluster trade continued in late afternoon deals, as a labour ministry stated that retail inflation for industrial workers inched up to 5.57 per cent in June 2023 as compared to 4.42 per cent in May this year, mainly due to higher prices of certain food items. Similarly, food inflation stood at 6 per cent against 3.24 per cent in the previous month and 6.73 per cent during the corresponding month a year ago. Traders also took a note of the private business survey showing that growth in India’s manufacturing activity eased in July for a second month, with some moderation in output and new orders, although the pace of expansion remained healthy. The sector has remained resilient despite declines in manufacturing activity in other major producers, suggesting Asia’s third-largest economy is still on robust footing. The Manufacturing Purchasing Managers’ Index, compiled by S&P Global, dipped to 57.7 last month from June’s 57.8.  Finally, the BSE Sensex fell 68.36 points or 0.10% to 66,459.31 and the CNX Nifty was down by 20.25 points or 0.10% to 19,733.55.       

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