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Benchmarks likely to make optimistic start on positive global cues

Sep-15-2022   08:37 Hrs IST

Indian equity markets ended lower on Wednesday as OECD said India’s gross domestic product (GDP) in the June quarter contracted 1.4 per cent quarter-on-quarter, when adjusted for seasonality, and was the second worst performance among the G20 countries - the first being China. Today, markets are likely to make positive start amid firm cues from global markets. Traders may get support with report that revenue secretary Tarun Bajaj is bullish that the Central Board of Indirect Taxes & Customs (CBIC) will be able to garner goods and services tax (GST) revenues of over Rs 1.5 trillion every month from October onwards. This comes at a time when GST collections have been falling behind the Rs 1.5-trillion mark for the last four months. Traders may take note of report that India and France agreed to set up an Indo-Pacific trilateral framework to roll out development projects, decided to expand strategic cooperation and vowed to work closely to deal with pressing global challenges such as food crisis triggered by the Ukraine war. However, some cautiousness may be prevailed later in the day as the commerce ministry in its latest data has said India’s exports rose marginally by 1.62 per cent to USD 33.92 billion and trade deficit more than doubled to USD 27.98 billion in August. Trade deficit in August 2021 stood at USD 11.71 billion. Imports rose by 37.28 per cent to USD 61.9 billion in August this year. Meanwhile, Apex body for exporters Federation of Indian Export Organisations (FIEO) said that with global trade facing headwinds due to the ongoing conflict between Russia and Ukraine, merchandise exports from India are expected to grow at a slower pace during the current fiscal. It may rise about 11 per cent to over $470 billion. Exports grew 45 per cent year-on-year (YoY) to $422 billion in 2021-22. Rising inflation and pile up of inventories in all major economies have affected the purchasing power, thus hitting demand. There may be some buzz in sugar stock as India is reportedly poised to allow 5 million tonnes of sugar exports in the first tranche for the new marketing year beginning October.

Asian markets are mostly trading higher in early deals on Thursday following the broadly positive cues from US markets overnight. The US markets ended higher on Wednesday as investors tried to find their footing after the biggest one-day drop in more than two years.

Back home, Indian equity benchmarks pared most of their initial losses but ended lower on Wednesday, led by losses in IT, TECK and Oil & Gas stocks. Key gauges made a gap-down opening as traders remained cautious with OECD said India’s gross domestic product (GDP) in the June quarter contracted 1.4 per cent quarter-on-quarter, when adjusted for seasonality, and was the second worst performance among the G20 countries - the first being China. Some cautiousness also came as a private report stated that investments by private equity and venture capital funds plummeted 80 per cent to $2.2 billion in August, a 19-month low.  Sentiments remained down-beat amid a report stating that investors' wealth eroded by more than Rs 2.21 lakh crore in early trade on Wednesday, with the market witnessing a selling-off amid prospects of aggressive rate hikes by the US Federal Reserve to tackle high inflation, and sluggish global trends. However, key indices managed to trim some of their initial losses in the afternoon session taking support from data showing that India’s inflation based on wholesale price index (WPI) eased to 12.41% in the month of August 2022 as against 13.93% in July 2022. Inflation in August is primarily contributed by rise in prices of mineral oils, food articles, crude petroleum & natural gas, basic metals, chemicals & chemical products, electricity, food products etc. as compared to the corresponding month of the previous year. Besides, foreign institutional investors (FIIs) stood as net buyer in Indian equities and bought worth Rs 1,956.98 crore on September 13, as per data available on the NSE.  Finally, the BSE Sensex fell 224.11 points or 0.37% to 60,346.97 and the CNX Nifty was down by 66.30 points or 0.37% to 18,003.75.

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