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Indian markets snapped their three-day losing streak on Friday, recovering from the blow seen across global equities due to credit rating downgrade of the US by Fitch. Today, markets are likely to get cautious start with focus on the upcoming RBI policy amid mixed moves across global markets. There are expectations that the Reserve Bank is likely to continue with the pause on the key interest rate at its upcoming monetary policy review, as concerns on the inflation front and keeping the borrowing cost stable to maintain the economic growth momentum persist. The RBI Governor-headed six-member Monetary Policy Committee’s (MPC) meeting is scheduled on August 8-10. The policy decision will be announced on August 10 by Governor Shaktikanta Das. There will be some cautiousness as latest data from the Reserve Bank of India (RBI) showed that foreign exchange reserves fell $3.2 billion to $603.9 billion in the week ended July 28. Reserves have fallen for the second straight week after hitting their highest in over a year in the week ended July 14. However, some support may come as K V Kamath, chairman of the National Bank for Financing Infrastructure and Development (NaBFID), expressed his confidence in India’s potential to achieve the $5-trillion economy target within 18 months. Meanwhile, the Directorate General of Foreign Trade (DGFT) in a late-night decision on Friday announced that it has decided to delay the licensing mandate for the import of laptops, tablets and personal computers till November 1, 2023. Import consignments can be cleared till 31.10.2023 without a license for restricted imports. There will be some reaction in pharma stocks as the Directorate General of Foreign Trade (DGFT) extended the deadline for implementing the Track and Trace system for pharmaceutical and drug exports until 1 February 2024. The extension applies to both Small Scale Industries (SSI) and non-SSI manufactured drugs. Meanwhile, Adani Ports, BEML, Biocon, Coal India, DLF, Grasim Industries, Hindalco, IRCTC, NHPC, NMDC, Oil India, ONGC, Tata Chemicals and Zee Entertainment Enterprises are among the top companies due to unveil their quarterly earnings this week.

The US markets ended lower on Friday as a mixed U.S. jobs report kept investors guessing on the Fed policy outlook. Asian markets are trading mixed on Monday as investors looked ahead to the release of U.S. inflation data as well as China's inflation and trade figures this week for direction.

Back home, Indian equity benchmarks witnessed respite after 3-day losing run and gained over half a percent on Friday lifted by IT, Telecom and TECK stocks, and robust Q1 results. After the gap-up start, key gauges hovered in a band throughout the session, as traders took encouragement with the finance ministry’s report stating that India's improved monsoon performance, continued expansion in manufacturing, and vigorous capital expenditure spending by the public and private sectors augur well for macroeconomic stability and growth during FY24.  Some optimism also came as S&P Global report said India can become a $6.7 trillion economy by 2031, from $3.4 trillion currently, if the country clocks an average growth of 6.7 per cent for 7 years. Traders also took a note of Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that India needs to focus on the manufacturing sector to achieve sustained growth of 7-7.5 per cent until 2030. He also said that manufacturing should be a key growth area given the country's comparative advantage in terms of skilled labour, improved physical infrastructure, well-established industrial ecosystem and large domestic market. Sentiments remained up-beat in late afternoon deals, as traders were optimistic after Finance Minister Nirmala Sitharaman said that the reforms brought in India since 2014 have enabled decentralisation of planning in India, which enabled States to set ambitious development targets and perform to their potential. Additional support also came after private report stated that foreign portfolio investors (FPIs) bought Indian shares worth 466.18 billion rupees ($5.63 billion) on a net basis in July, data from the National Securities Depository (NSDL). This is the highest monthly FPI inflows since August 2022. Besides, the Employees’ Provident Fund Organisation received a total contribution of Rs 64885.60 crore during 2022-23, the highest ever under its Employees’ Pension Scheme. Finally, the BSE Sensex rose 480.57 points or 0.74% to 65,721.25 and the CNX Nifty was up by 135.35 points or 0.70% to 19,517.00.

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