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Indian markets ended modestly higher on Monday in a choppy session as buying in auto stocks aided the gains after reporting encouraging sales for March. Indian markets remained shut on Tuesday on account of public holiday. Today, start of the session is likely to be pessimistic as global growth concerns returned to the fore after manufacturing and jobs data in the US disappointed investors. Domestically, traders will be concerned with growth outlook as the World Bank in a report said India’s GDP is expected to moderate to 6.3 per cent, as against earlier estimate of 6.6 per cent, due to moderation in consumption in FY24. It added growth is likely to be constrained by slower consumption growth and challenging external conditions. Also, the Asian Development Bank said India's economic growth is expected to moderate to 6.4 per cent in the current financial year due to tight monetary conditions and elevated oil prices as compared to 6.8 per cent expansion for the financial year ended March 2023. However, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 321.93 crores on April 3, the National Stock Exchange’s provisional data showed. Traders may be taking encouragement as gross direct tax collection in 2022-23 rose by around 20 per cent to Rs 19.68 lakh crore, exceeding the government's revised collection target. Some optimism may come as Commerce and Industry Minister Piyush Goyal said the country's goods exports touched $447 billion till the last count for 2022-23 fiscal year as against $422 billion in 2021-22. Traders may take note of Crisil Ratings’ statement that India Inc's key credit ratios moderated sharply in the second half of FY23 on expected lines and are likely to go down further, maintaining that upgrades will continue to outpace downgrades. Meanwhile, investors will be looking for the Services PMI data to be out later in the day. Stocks related to upstream oil company and aviation industry will be in focus as the Centre slashed windfall tax on domestically produced crude oil to nil from Rs 3,500 a tonne, effective from April 4. It has also reduced the levy on diesel to 50 paise per litre from Rs 1. The move means crude oil, aviation turbine fuel (ATF), and petrol will not attract windfall tax. There will be some reaction in auto industry stocks with data released by the Federation of Automobile Dealers Associations (FADA) showing that automotive retail sales saw a 14 per cent rise in March on a year-on-year (YoY) basis. For the whole of financial year 2022-23 (FY23), sales grew 21 per cent YoY.

The US markets ended lower on Tuesday after evidence of a cooling economy exacerbated worries that the Federal Reserve's campaign to rein in decades-high inflation may cause a deep downturn. Asian markets trading mixed on Wednesday following a lower close on Wall Street.

Back home, Indian equity benchmarks managed to end a range bound session higher on the first trading day of the financial year 2023-24, helped by buying in Telecom, Auto and Realty shares despite a spike in crude oil prices. Markets made a positive start as traders took some encouragement with report that GST collection grew 13 per cent in March to Rs 1.60 lakh crore - the second highest mop-up since the rollout of the indirect tax regime. Some optimism also came as Commerce and Industry Piyush Goyal exuded confidence that India’s merchandise and services exports will cross $2 trillion by 2030 from the current level of $765 billion. However, markets soon slipped in red as traders turned cautious with the latest public debt management report showing that the government’s total liabilities rose to Rs 150.95 lakh crore in December quarter from Rs 147.19 lakh crore in the three months ended September 2022. However, in the late afternoon deals, markets erased all of their initial losses to settle in green amid report stating that India's manufacturing sector activity improved in the month of March, as growth of factory orders and production quickened to the strongest in three months. With pressure on supply chains subsiding and raw material availability improving, input cost inflation retreated to its second-lowest mark in two-and-a-half years. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to 56.4 in March from 55.3 in February, signaling the strongest improvement in operating conditions in 2023 so far. Meanwhile, RBI's rate-setting panel started its three-day meeting amid expectations that the central bank may go for 25 basis points hike in benchmark interest rate, probably the last in the current monetary tightening cycle that began in May 2022. Finally, the BSE Sensex rose 114.92 points or 0.19% to 59,106.44 and the CNX Nifty was up by 38.30 points or 0.22% to 17,398.05.

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