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Indian markets snapped the five-day winning run and ended a highly volatile session in red on Friday after the RBI cut the growth projection for 2024-25 and kept the policy rates unchanged, but cut the Cash Reserve Ratio, boosting money with lenders to support a slowing economy. Today, markets are likely to get negative start amid mixed oil prices in early Asia trade on Monday as concerns over weak Chinese demand were offset by rising tensions in the Middle East following the rebel overthrow of Syrian President Bashar al-Assad. Some cautiousness may come as industry body CII has suggested the government to stick to the fiscal deficit target of 4.9 per cent of GDP for 2024-25 and 4.5 per cent for 2025-26, cautioning that overly aggressive targets beyond these could adversely affect India's economic growth. However, some optimism may come later in the day as Union Education Minister Dharmendra Pradhan asserted that India will become a $30 trillion-economy by 2047. Pradhan said that India, the fastest-growing global economy, is currently in the fifth position and will bag the third spot in the next three years. Some support may come as foreign investors have staged a strong comeback to Indian equities with a net investment of Rs 24,454 crore in the first week of December amid stabilising global conditions and expectations of potential US Federal Reserve rate cuts. Traders may be taking encouragement as Foreign direct investment (FDI) inflows into India have crossed the $1 trillion milestone in the April 2000-September 2024 period, firmly establishing the country's reputation as a safe and key investment destination globally. Besides, the RBI said India’s forex reserves increased by $1.51 billion to $658.091 billion for the week ended November 29. The overall reserves had dropped by $1.31 billion to $656.582 billion in the previous reporting week. Traders may take note of report that Finance Minister Nirmala Sitharaman said the GDP slowdown in September quarter was not systemic and the economic activity in third quarter, with better public expenditure, is likely to compensate for the moderation. India recorded a 7-quarter low GDP growth of 5.4 per cent in July-September FY25. In the first quarter, the growth was 6.7 per cent. Metal stocks will be in focus as International Copper Association India MD Mayur Karmarkar said India’s copper demand is expected to clock a 10-13 per cent growth in the second-half of the current financial year amid constrained by supply-side issues. Meanwhile, Property Share Investment Trust will debut on the bourses today.

The US markets ended mostly in green on Friday supported by better-than-expected November jobs data, which bolstered hopes for another Federal Reserve rate cut later this month. Asian markets are trading mostly higher on Monday as traders assessed revised economic growth data from Japan and China’s November inflation data.

Back home, in a volatile session, Indian equity benchmarks snapped a five-day winning streak to close flat with a negative bias on Friday, due to losses in TECK, Healthcare and IT stocks. After making flat-to-positive start, the key gauges remained confined to a tight band throughout the day, after the Reserve Bank of India (RBI) kept key interest rates unchanged due to ‘high inflation’. The central bank has maintained the key policy repo rate at 6.5 per cent. This is for the 11th consecutive time that the RBI has kept the repo rate unchanged. The RBI has maintained the repo rate at 6.5 per cent since February 2023. Besides, the RBI has cut real Gross Domestic Product (GDP) growth forecast for FY25 to 6.6% from 7.2% earlier. Also, it has revised the CPI inflation forecast for FY25 to 4.8% from 4.5% earlier. However, to improve liquidity in the banking system, RBI announced a reduction in the cash reserve ratio (CRR) to 4 percent, a cut of 50 bps, done in two tranches of 25 bps each. Some concern also came as India Ratings and Research’s report stated that the current account deficit (CAD) for the September quarter is set to widen to 1.6 per cent, the most in the last seven quarters. However, losses remained capped as traders took some support with the data available in latest Annual Periodic Labour Force Survey (PLFS) Report stating that the estimated Worker Population Ratio (WPR) indicating employment during the last 7 years including the COVID period has increased from 46.8% in 2017-18 to 58.2% in 2023-24. During the same period, Unemployment Rate (UR) on usual status for persons of age 15 years and above has decreased from 6.0% to 3.2%. Some support also came with report that Union Finance Minister Nirmala Sitharaman said the sharp decline in the growth of gross domestic product (GDP) in the September quarter is ‘not systemic’ and revealed that she expects it to pick up in the third quarter.  Finance minister expressed confidence that India's economic growth won't be badly affected despite reporting a seven-quarter low GDP of 5.4 percent. Finally, the BSE Sensex fell 56.74 points or 0.07% to 81,709.12, and the CNX Nifty was down by 30.60 points or 0.12% to 24,677.80.

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