IGI Logo

Indian markets ended lower on Monday largely due to profit taking after recent gains. Markets were closed on Tuesday for Ganesh Chaturthi. Today, markets likely to get gap-down opening amid weak cues from the overseas markets as investors await the Federal Reserve's monetary policy announcement later in the day. Traders will be concerned as showing the effect of the slowdown in global economic activity, the equity foreign direct investment (FDI) into India declined sharply to $13.9 billion in April-July 2023 from $22.04 billion a year ago. The net FDI, inflows minus outflows, declined from $17.28 billion in April-July 2022 to $5.70 billion in April-July 2023 on account of moderating gross FDI and a rise in repatriation. However, some support may come later in the day as the Finance Ministry said the net direct tax collection increased 23.51 per cent to over Rs 8.65 lakh crore till mid-September on higher advance tax mop-up from corporates. The net collections have reached 47.45 per cent of the full-year budget estimates (BE) of Rs 18.23 lakh crore. Besides, an article published in the latest RBI bulletin said amid weakening global prospects, the Indian economy is gaining strength led by domestic private consumption and fixed investment with strong public sector capital expenditure. Meanwhile, as per a report, the government may soon tweak the production-linked incentive scheme for pharmaceuticals, drones and textiles sectors to encourage investment and boost manufacturing. These sectors have been identified after inter-ministerial consultations on the performance of the scheme for various products. IT stocks will be in focus with a private report that a few large Indian IT services companies are expected to see a recovery in revenue growth at 9-10 per cent in FY25 from 4-5 per cent projected in FY24. This is due to a ramp-up in recently-signed mega deals, a strong pipeline of cost take-outs, and improvement in discretionary spending. Shares of airline companies are likely to be in focus amid reports that Akasa Air may be forced to shut down amid mass resignations by pilots. There will be some reaction in EV company’s stocks as Electric vehicle (EV) sales in India topped the 1 million mark in less than nine months in 2023, a milestone that took an entire year in 2022.   According to data from the Ministry of Road Transport and Highways’ Vahan Dashboard, 1,037,011 EVs were registered with regional transport offices till September 19.

The US markets ended in red on Tuesday as investors looked for any change in communication from the Federal Reserve. Asian markets are trading mostly lower on Wednesday as elevated oil prices raised inflation concerns.

Back home, Indian equity benchmarks ended in red terrain on Monday as profit-taking came into play in Telecom, Realty and TECK stocks. Markets made a negative start and stayed in red for whole day, as traders were concerned after India’s merchandise trade deficit widened to a 10-month high of $24.16 billion in August. India’s exports declined by 6.86 per cent to $34.48 billion in August this year as against $37.02 billion in the same month last year. Imports too declined by 5.23 per cent to $58.64 billion as against $61.88 billion recorded in August 2022.  Some concern also came as latest data by the Reserve Bank of India (RBI) showed India’s foreign exchange reserve declined by $5 billion to $594 billion in the previous week on the back of a fall in foreign currency assets. Key gauges extended some losses in late afternoon deals, even as exchange data showing that foreign Institutional Investors (FIIs) were buyers on Friday as they bought equities worth Rs 164.42 crore. The street overlooked reports that Fitch Ratings upwardly revised the global growth forecast for 2023 by 10 basis points to 2.5 per cent, reflecting surprising resilience so far this year in the US, Japan, and emerging markets excluding China. Meanwhile, in order to encourage greater utilization of the PM GatiShakti National Master Plan (NMP) amongst the States/UTs, the Logistics Division, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry is organizing weekly meetings. Finally, the BSE Sensex fell 241.79 points or 0.36% to 67,596.84 and the CNX Nifty down by 59.05 points or 0.29% to 20,133.30.