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Indian markets ended lower on Friday amid selling seen in the IT, Pharma and Banking names. However, buying in media and oil & gas stocks limited extent of the losses. Today, markets are likely to get flat-to-positive start tracking positive cues from Wall Street. Investors will be eyeing crucial India Services and Composite Purchasing Manager's Index (PMI) readings (along with the US, the UK, and China) for December on tap today is expected to give markets important indications about the strength of the economy. Traders will be taking encouragement with Commerce and Industry Minister Piyush Goyal’s statement that the government is working on an export strategy to further accelerate the country's goods and services shipments. He said the ministry is working on a very targeted manner to take the exports to $2 trillion by 2030 by addressing concerns of exporters and identifying areas of India's competitive advantages and strengths. Traders may take note of report that three weeks before the Union Budget for FY26, the National Statistics Office will release the first advance estimates of gross domestic product (GDP) for FY25 on January 7 amid a moderation in growth expectations. There are expectations that resilience in rural demand, along with sustained agricultural and services-sector output, will keep India on a growth path towards achieving 6.4-6.8 per cent expansion in FY25. However, there may be some cautiousness amid continued selling by foreign institutional investors (FIIs). FIIs net sold Indian equities worth Rs 4,227.25 crore on Friday. Traders may be concerned as India’s foreign exchange reserves continue to decline, extending downhill journey for three months now. data from the Reserve Bank of India (RBI) showed, in the week that ended December 27, the country’s foreign exchange kitty declined by $4.112 billion to $640.279 billion. Auto component industry stocks will be in focus with report that the Indian auto components sector faces a projected revenue slowdown to 6-8 per cent this and the next financial year due to softening of demand and sluggish global markets, industry players are actively diversifying their markets to mitigate the impact. There will be some reaction in telecom stocks with report that TRAI will start, this month, a pilot to onboard paper-based and past permissions given by customers for receiving commercial communications onto its digital distributed ledger technology (DLT) platform, a process that in the long-run would include scrubbing and verifying their current validity and offering opt-outs to those keen on it. Textile industry stocks will be in limelight as Union Minister of Textiles Giriraj Singh stated that the textile ministry is committed to helping the industry to reach the market size of $300 billion in year 2030 and provide employment to 6 crore persons in textile value chain. Meanwhile, during the week, three mainline IPOs (Initial Public Offerings), and four Small and Medium Enterprises (SME) IPOs set to open for public subscription.

The US markets ended higher on Friday as some traders looked to pick up stocks at relatively reduced levels following recent weakness. Asian markets are trading mixed on Monday as investors assessed business activity figures from several key economies in the region.

Back home, Indian equity benchmarks took a pause after two consecutive days of gains, shedding more than half a percent on Friday as investors pared exposure to Bank and IT stocks ahead of the earnings season starting next week. A depreciating rupee against the US dollar further weighed on sentiment. After making a slightly positive start, key gauges fell sharply as traders turned cautious with credit rating agency ICRA’s report stating that banks credit growth may ease to 9.7-10.3 per cent in FY26, weighed down by the persisting high credit-to-deposit (CD) ratio and implementation of the proposed changes in the liquidity coverage ratio (LCR) framework. ICRA has revised its credit growth estimate downwards to 10.5-11 per cent for FY25 from its earlier estimate of 11.6-12.5 per cent. Some concern also came with Chairman of the CII National Committee on EXIM, Sanjay Budhia’s statement that Indian exporters are grappling with significant liquidity challenges due to high interest rates and a decline in export finance, which are undermining their competitiveness. However, markets managed to erase some losses in late morning deals as traders took some support with exchange data showing that Foreign Institutional Investors (FIIs) turned buyers on Thursday after remaining net sellers for the past many days. They bought equities worth Rs 1,506.75 crore. But recovery proved short-lived as key gauges slipped further in late afternoon deals and ended near day’s low points, as sentiments remained downbeat amid reports that more than half of the respondents surveyed in the Reserve Bank of India’s (RBI) Systemic Risk Survey (SRS) do not expect a revival in the private capital expenditure cycle in the coming year, contrary to the central bank’s own assessment that economic activity is likely to pick up in the second half of this year. Investors overlooked a private report that Maharashtra has attracted Rs 1.13 lakh crore in foreign direct investment (FDI) in the first six months of FY 2024-25. This figure is nearly equivalent to the total FDI the state has received annually over the last four years. Finally, the BSE Sensex fell 720.60 points or 0.90% to 79,223.11, and the CNX Nifty was down by 183.90 points or 0.76% to 24,004.75.

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