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Indian markets ended higher on Wednesday tracking gains in Europe and Asian equities ahead of the key US Federal Reserve's interest rate outcome. Today, markets are likely to get positive start tracking gains in global peers. Traders will be taking encouragement as Commerce and Industry Minister Piyush Goyal expressed hope that steps such as focus on self-sufficiency, technology, stronger currency and fundamentals would help India become a $55-trillion economy by 2047. He said that the government is also focusing on areas such as moving from oil to electric vehicles and bringing quality in the manufacturing. Some support will come as Finance minister Nirmala Sitharaman said the budget seeks to strike a fine balance among several overriding priorities and will provide impetus to local manufacturing, boost employment and raise India's share in global growth. She added gowth, employment, welfare spending, capital investments, and fiscal consolidation are given equal place. Besides, according to the latest data released by the Controller General of Accounts (CGA), a sharp reduction in capital expenditure (capex) during election months and record-high dividend from the Reserve Bank of India (RBI) led to a decrease in the central government’s fiscal deficit to 8.41 per cent of the full-year target for the April-June quarter (Q1) of 2024-25 (FY25), along with the most recent FY25 Budget figures. In the corresponding period of 2023-24 (FY24), fiscal deficit was 25.3 per cent of the full-year target. However, persistent foreign fund outflows likely to dent sentiments. The foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 3,462 crore on July 31. Some cautiousness may come as the output of India’s eight key infrastructure industries expanded by 4 per cent year-on-year in June, the slowest growth in 20 months, according to data released by the Department for Promotion of Industry and Internal Trade. The slowdown in growth can be ascribed to factors such as a high base and moderating electricity demand due to the monsoon. Meanwhile, investors will be eyeing the Manufacturing PMI data to be out later in the day for more directional cues. Metal stocks will be in focus after China’s manufacturing activity unexpectedly shrank for the first time in nine months in July, a private survey showed, a sign the country’s export machine might be cooling, darkening the economy’s outlook. The Caixin manufacturing purchasing managers index fell to 49.8 last month from 51.8 in June. Stocks of oil & gas and aviation sector will be in limelight as the Union government slashed windfall tax on domestically produced crude oil to Rs 4,600 per tonne from previous Rs 7,000 per tonne. Windfall tax on export of diesel and aviation turbine fuel (ATF) has been kept at nil.

The US markets ended higher on Wednesday after Federal Reserve Chair Jerome Powell suggested the possibility of an interest rate cut at the next meeting, should inflation data continue to show signs of easing. Asian markets are trading mostly in green on Thursday following Powell’s hints about a potential September rate cut.

Back home, in a range bound trading session, Indian equity benchmarks garnered notable gains on Wednesday, with Sensex and Nifty closing higher by over 0.30% each, as investors eagerly awaited the Federal Reserve's monetary policy decision later in the day for direction. The Fed is widely expected to leave interest rates unchanged, but the accompanying statement might provide hints on the timing and pace of interest-rate cuts in the next few months. Markets made an optimistic start of the day, tracking firm cues from other Asian markets on expectations for more stimulus from Beijing to bolster its struggling economy. Sentiments got boost as the government has garnered Rs 98,681 crore from long term capital gains tax on listed equities in 2022-23, a 15 per cent growth over the previous year. Firm trade persisted over the Dalal Street during the whole day, supported by heavy buying at Utilities and Power counters. Traders got encouragement as India Ratings & Research (Ind-Ra) upped India's GDP growth forecast for the current fiscal to 7.5 per cent from 7.1 per cent projected earlier on expectation of improved consumption demand. It said ongoing growth momentum led by government capex, deleveraged balance sheets of corporates/banks, and incipient private corporate capex cycle has now found support from the union government budget. Sentiments remained optimistic, after Commerce and Industry Minister Piyush Goyal has said that incentives worth Rs 9,721 crore have been claimed under the PLI scheme for nine sectors, including large scale electronics manufacturing and pharmaceuticals. Finally, the BSE Sensex rose 285.94 points or 0.35% to 81,741.34, and the CNX Nifty was up by 93.85 points or 0.38% points to 24,951.15.

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