IGI Logo

Indian markets ended lower on Thursday amid a broad risk aversion in global financial markets. Today, start of the session is likely to be optimistic. Sentiments will get a boost with the finance ministry in a report stated that growth momentum gathered in the January-March quarter will be sustained in the April-June quarter of the current financial year amid the strengthening of the current account balance. Some support will come as an 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. It said but a global slowdown and lagged effect of a policy rate hike by RBI could slow down growth to 6 per cent in the current fiscal. Traders may take note of Chief Economic Advisor V Anantha Nageswaran said India needs to focus on the manufacturing sector to achieve sustained growth of 7-7.5 per cent until 2030. 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. However, upside may remain capped amid as a cautious undertone may prevail ahead of the U.S. jobs report due later in the day that could offer more clues on the Federal Reserve's rate-hike path. Foreign fund outflows likely to dent domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) offloaded shares worth Rs 317.46 crore on August 3. Meanwhile, India Inc's April-June quarter (Q1FY24) results for fiscal year 2023-24 will be tracked by investors. Companies such as SBI, M&M, Britannia, Fortis Healthcare, Delhivery and BHEL, are some of the notable names to report Q1 results on Friday, August 4.

The US markets ended lower on Thursday after a surge in Treasury yields and mixed economic readings. Asian markets are trading mixed on Friday as rising bond yields continue to put pressure on equities.

Back home, Indian equity benchmarks continued their downward trend for the third consecutive session on Thursday in tandem with a bearish trend in global markets. Markets made a negative start and continued to drift lower throughout the day as traders got anxious with exchange data showing that foreign institutional investors (FIIs) offloaded equities worth Rs 1,877.84 crore on Wednesday. Sentiments remained down-beat even as data released by S&P Global showed that India's services activity spiked sharply to 62.3 in July from a Purchasing Managers' Index (PMI) of 58.5 in June. At 62.3, the July services PMI is the highest print in over 13 years. The last time it was higher was in June 2010. It has also stayed above the key level of 50 that separates expansion in activity from a contraction for 24 months in a row. Markets extended fall in afternoon deals, amid a private report stating that with inflation inching up, the Reserve Bank of India is likely to maintain the status quo on key interest rates. The six-member Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, will hold the meeting from August 8 to 10. However, key indices managed to cut some losses in final hour of trade, taking support from private report that upgraded India's status to overweight as it believes that the country’s reform and macro-stability agenda supports a strong capex and profit outlook. An overweight rating means that it expects India's economy to perform better in the future. The upgrade in the backdrop of US losing AAA status and economic slowdown in China. Meanwhile, the Goods and Services Tax (GST) Council has decided to implement a 28 per cent tax on electronic gaming, casinos, and horse racing, but this would be applied on the initial amount paid upon entry, and not on the total value of each bet placed. The proposed amendments are likely to be introduced from October 1, with a comprehensive review to be conducted six months after implementation. Finally, the BSE Sensex fell 542.10 points or 0.82% to 65,240.68 and the CNX Nifty was down by 144.90 points or 0.74% to 19,381.65.

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