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Benchmark indices likely to get cautious start tracking week global cues

Apr-13-2023   08:32 Hrs IST

Indian markets ended higher for an eighth consecutive day on Wednesday amid sustained inflows from foreign portfolio investors (FPIs). Today, start of the last trading session of holiday truncated week is likely to be cautious amid weak global cues. There may be some volatility in the trade ahead of weekly F&O expiry later in the day. Traders will be concerned over the growth prospects as the UN Trade and Development Conference (UNCTAD) in its latest Trade and Development Report Update stated that India's economic growth is projected to decelerate to 6 per cent in 2023 from 6.6 per cent in 2022. It also expects global growth in 2023 to drop to 2.1%, compared to the 2.2% projected in September 2022, assuming the financial fallout from higher interest rates is contained to the bank runs and bailouts of the first quarter. Traders may take note of Finance Minister Nirmala Sitharaman’s statement that there is a need to augment present global efforts, including those of the G-20 to address growing debt distress across the globe, as she stressed on debt transparency and information-sharing on this issue. However, some respite may come later in the day as traders may react positively to encouraging macro-economic data. The government data showed that CPI-based retail inflation in India eased further and fell to a 15-month low of 5.66 per cent in March on an annual basis as food inflation moderated on account of falling vegetable prices, offset in part by surging cereal prices. Inflation stood at 6.95 per cent in March 2022. Also, data from the Ministry of Statistics showed that India's industrial output, as measured by the index of Industrial production or IIP, rose marginally to 5.6 per cent in February from 5.5 per cent in January 2023, mainly due to good performance of the power, mining and manufacturing sectors. Some support will come as the International Monetary Fund said India is expected to have a stable debt-to-GDP ratio going forward. Meanwhile, the commerce ministry said trade ministers of India and France have held discussions related to the ongoing talks for a free trade agreement between India and the European Union. Information and Technology (IT) industry stocks will be in focus after Tata Consultancy Services (TCS) reported net profit of Rs 11,392 crore for Q4, up 14.8 per cent year-on-year (YoY). Investors await more of financial results from India Inc for domestic cues, with Infosys due to post its earnings later in the day.

The US markets ended lower on Wednesday after minutes from the Federal Reserve's March policy meeting revealed concern among several members of the Federal Open Markets Committee (FOMC) regarding the regional bank liquidity crisis. Asian markets are trading mostly in red on Thursday following a lower close on Wall Street.

Back home, Indian equity benchmarks extended gains for the eighth straight session on Wednesday, propelled by intense buying in Healthcare, IT and Auto stocks. A strengthening rupee and positive opening in European markets further bolstered sentiment. Markets made a cautious start as traders remained on sidelines ahead of macro-economic data -- consumer price index (CPI) and Index of Industrial Production (IIP) -- due to be released later in the day. However, key gauges soon inched gradually higher as the day progressed as traders continued to take support with the India Meteorological Department (IMD), the state-run official weather agency, predicting ‘normal’ rains during this year’s monsoon season - June to September - at 96 per cent of the Long Period Average (LPA) in spite of the anticipated El Nino conditions. Markets extended gains and traded at day’s high points in late afternoon deals, taking support from reports that foreign investors turned net buyers of Indian shares over the past couple of sessions. Foreign investors bought about $1 billion in domestic equities from March 28 to April 10. Traders took note of report that trade ministers of India and France have held discussions related to the ongoing talks for a free trade agreement between India and the European Union. The ministers discussed priority areas related to India - EU FTA (free trade agreement) negotiations where issues related to market access were deliberated. Investors awaited the kick-off of the fourth-quarter reporting season with Tata Consultancy Services (TCS) to report result post market hours. Finally, the BSE Sensex rose 235.05 points or 0.39% to 60,392.77 and the CNX Nifty was up by 90.10 points or 0.51% to 17,812.40.

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