Opening Bell : Benchmarks likely to get positive start; all eyes on Donald Trump Tariff
Indian equity benchmarks are likely to get positive start after the Indian economy recovered in the December quarter to grow at 6.2 percent after sinking to a seven-quarter low of 5.6 percent in the July-September period. This comes despite the uncertainty around US President Donald Trump's plan to impose tariffs on Canada, Mexico, and China this week. Investors await February Manufacturing purchasing managers' index data from India.
Some of the key factors to be watched:
India's economy set for Q4FY25 boost with increased govt. spending and capex: A private report indicated that India's economy is expected to see a boost in Q4FY25, supported by a sustained increase in government spending and capital expenditure (Capex), alongside a pickup in consumption driven by the Maha-Kumbh and wedding season.
Core industries grew in January: The commerce ministry data showed that the combined Index of Eight Core Industries increased by 4.6% (provisional) in January 2025 as compared to last year. The production of cement, refinery products, coal, steel, fertilizers and electricity recorded positive growth in January 2025.
India’s forex reserve jumps: The Reserve Bank said India’s forex reserve jumped by $4.758 billion to $640.479 billion in the week ended February 21. In the previous reporting week, the overall reserves had dropped by $2.54 billion to $635.721 billion.
Fiscal deficit till January widens of revised target: The central government's fiscal deficit up to January this financial year hit 74.5% of the revised annual target, compared with 63.6% a year before. As per a private report, a spike in capital expenditure and a double tranche of devolution to states in January caused the fiscal gap to widen from a year earlier.
Stocks of hospitals will be in focus: The Crisil Ratings said private hospitals in India are set to expand their capacity by over 4,000 beds in the next financial year, with an investment of Rs 11,500 crore, followed by an addition of approximately 6,000 beds in FY25.
On the global front: The US markets ended higher on Friday after a choppy trading session, with Dell Technologies dipping and other tech stocks climbing after a meeting between US President Donald Trump and Ukrainian counterpart Volodymyr Zelenskiy ended in disaster. Asian markets are trading mostly in green on Monday as the threat of imminent tariffs lurked in the background, while bitcoin surged on news it would be included in a new U.S. strategic reserve of cryptocurrencies.
Back home, Indian equity benchmarks witnessed a sharp sell-off and ended with losses of around two percent on Friday amid broad-based selling ahead of key GDP data and concerns over fresh tariff comments from US President Donald Trump and a slowing U.S. economy. Finally, the BSE Sensex fell 1414.33 points or 1.90% to 73,198.10, and the CNX Nifty was down by 420.35 points or 1.86% to 22,124.70.
Some of the important factors in trade:
Relentless foreign fund outflows: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 556.56 crore in the capital markets on net basis on Thursday, according to exchange data. So far in February, FIIs have sold Indian equities worth Rs 47,349 crore.
India’s economic growth remained robust: Traders overlooked the International Monetary Fund’s (IMF) report showing that India’s economic growth remained robust, with Gross domestic product (GDP) growth of 6 percent Y-o-Y in the first half of 2024/25.
Moderation in inflation creates policy space for RBI to cut rates: The National Council of Applied Economic Research (NCAER) in its the monthly economic review has said that moderation in inflation to five-month low of 4.3 per cent in January has provided RBI more space to cut interest rate in policy meet.
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