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Indian markets recovered smartly from the low of the day and settled with marginal losses dragged by losses in IT and select banking shares. Today, domestic indices are likely to open in red on the first day of the new calendar year 2025 with muted volumes as markets across Australia, Japan, South Korea, Hong Kong, the UK, Europe, and the US remain closed on account of New Year’s Day holiday. Traders will be concerned as data from the National Securities Depository showed that India experienced a drastic drop in Foreign Portfolio Investment (FPI) inflows in 2024, with net investments falling by 99 per cent compared to the previous year. The data highlighted that the net FPI inflows came down from Rs 1.71 lakh crore in 2023 to just Rs 2,026 crores in 2024. The NSDL data highlights significant challenges for India to attract foreign investment. One of the primary reasons for this decline was the dominance of the US economy in the global markets. There will be some cautiousness as the government data showed that the output of eight key infrastructure sectors slowed down to 4.3 per cent in November 2024 against 7.9 per cent growth registered in the same month last year. On a monthly basis, the production growth of these sectors last month rose to a four-month high. However, some support may come as a report by economic think tank Global Trade Research Initiative (GTRI) noted that India's overall exports of goods and services in 2024 has estimated to cross $814 billion, an increase of 5.58 per cent. In 2023, the country's merchandise and services exports stood at $768.5 billion. Meanwhile, data released by the Controller General of Accounts showed that the government's capital expenditure in the April-November period of financial year 2024-25 (FY25) continued to contract with a 12.3 per cent decline year-on-year (Y-o-Y). Auto stocks will be in focus amid December sales data. There will be some reaction in hospital industry stocks with report that the revenue of small and medium (SME) hospitals - with annual revenue of less than Rs 250 crore - is expected grow a sedate 3-5 per cent year-on-year and 5-8 per cent in financial year 2025 and 2026, respectively. The key reason is patients continuing to favour large hospital chains on the back of pan-India insurance penetration increasing to 38-40 per cent from 23 per cent in FY15. Meanwhile, traders may begin taking positions in stocks ahead of the October-December (Q3FY25) results season, which begins with Tata Consultancy Services’ (TCS’) results on January 9, 2025. Infosys will announce its Q3FY25 results on January 12, 2025. In the primary market, mainboard Indo Farm Equipment IPO will enter its second day today. That apart, the initial public offering of Leo Dry Fruits and Spices will open for subscription today.

The US markets ended lower on Tuesday as elevated US Treasury yields again contributed to a lackluster close in an otherwise strong year for equities. Asian markets remained mostly close on Wednesday on account of New Year holiday.

Back home, Indian equity benchmarks recovered smartly from day’s lows and settled flat on the last trading session of calendar year (CY) 2024, amid continued foreign fund outflows and weak global market trends. Foreign Institutional Investors (FIIs) offloaded Rs 1,893.16 crore in the capital markets on net basis on Monday, according to exchange data. Markets made a gap-down opening and stayed in red for most part of the day as traders were concerned with the data released by the Finance Ministry showing that India's external debt rose to $ 711.8 billion as of September this year, up 4.3 per cent over June 2024. Investors also remained on sidelines ahead of India’s infrastructure output data for the month of November to be released later in the day for more directional cues. Pressure from selling in major IT, TECK and Realty stocks also weighed on the indices. However, markets erased most of their losses in late afternoon deals and ended flat. Traders took some support with a RBI report stating that the Indian economy is exhibiting resilience and stability, and the gross domestic product (GDP) is projected to grow at 6.6 per cent in 2024-25, aided by a revival in rural consumption, a pickup in government consumption and investment, and strong services exports. Some support also came as a report by CRISIL stated that India's current account deficit (CAD) is to remain in a safe zone at around 1 per cent of GDP for fiscal 2025, up from 0.7 per cent in the previous year. Meanwhile, with an aim to guard domestic manufacturers from the increase in imports that are subsidised by Vietnam, the government has initiated a countervailing duty probe into increased imports of a chemical - Calcium Carbonate Filler Masterbatch - used in the plastic industry, from Vietnam following a complaint from domestic players. Finally, the BSE Sensex fell 109.12 points or 0.14% to 78,139.01, and the CNX Nifty was down by 0.10 points to 23,644.80.

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