IGI Logo

Indian markets after a gap-down opening recovered sharply and ended with decent gains on Thursday amid buying in shares of Reliance Industries, financials, metals and power stocks. Today, markets are likely to open in green tracking overnight gains on Wall Street as well as frim cues from Asian peers as new economic data from the U.S. fueled hopes that the U.S. central bank will cut interest rates in the coming months. Also, fall in crude oil prices overnight likely to aid sentiments. Some support will come as Additional Secretary in the commerce ministry Rajesh Agrawal said India’s agriculture exports this fiscal are expected to reach the last year’s level of $53 billion despite restrictions imposed on shipments of certain key commodities, including rice, wheat and sugar. In 2022-23, the country’s agri exports stood at $53 billion. Traders may take note of a publication titled ‘Re-examining Narratives: A Collection of Essays’, penned by Chief Economic Advisor (CEA) V Anantha Nageswaran and his team stating that India’s exports are becoming less vulnerable to changes in world demand and exchange rates. Meanwhile, the Reserve Bank of India (RBI) said it will conduct a seven-day variable rate repo auction for a notified amount of Rs 1.75 lakh crore on December 22. This announcement came when the liquidity in the banking system was in a huge deficit of around Rs 2.27 lakh crore. However, foreign fund outflows may restrict gains. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FIIs) net sold shares worth Rs 1,636.19 crore on December 21. Textile industry stocks will be in limelight as the Cotton Association of India (CAI) estimated that cotton production may decline by around 8 per cent to 294.10 lakh bales in the 2023-24 season due to lower yields in most growing regions. There will be some reaction in apparel industry stocks with as The Apparel Export Promotion Council (AEPC) said a free trade agreement with Oman will help boost apparel exports as huge business opportunities are there in the Gulf nation for Indian exporters. The bilateral trade between the two countries stood at $12.39 billion in 2022-23, up from $9.99 billion in the previous year.

The US markets ended higher on Thursday winning back much of the previous day's losses, as economic data fuelled optimism that the Federal Reserve would ease monetary policy and revived investor risk appetite. Asian markets are trading mostly in green on Friday with Japan reporting its November inflation numbers and its central releasing minutes of the October monetary policy meeting.

Back home, Indian equity benchmarks took a breather after yesterday’s sell-off and gained nearly half a percent on Thursday led by a sharp recovery in Utilities, Power and PSU stocks. Market made a subdued start as traders got anxious with a private report stating that the country's total debt, or the total outstanding bonds which are being traded in the market, rose to $2.47 trillion (Rs 205 lakh crore) in the September quarter. The total debt amount in the March quarter of the previous fiscal was $2.34 trillion (Rs 200 lakh crore). Some cautiousness also came in amid the new Covid-19 scare with the detection of new variant JN.1 in states like Goa, Kerala and Maharashtra. Besides, weak cues from global markets weighted on the domestic sentiment. However, markets recovered gradually in afternoon deals and finally settled around the day’s high as traders took support with an analysis conducted by the PHD Research Bureau, PHD Chamber of Commerce and Industry showing that India has emerged as the most resilient economy among the top ten leading economies in the post pandemic years of 2022, 2023. Some solace also came as formal job creation under the Employees' Provident Fund Organisation (EPFO) increased 18.2% year-on-year in October with the addition of 1.53 million net new subscribers. Traders also took a note of an article published in the Reserve Bank of India (RBI) bulletin stated that broad-based strengthening of economic activity in India will likely be sustained and retail inflation is expected to ease to 4.6 per cent in the first three quarters of 2024-25 from the latest print of 5.6 per cent. Finally, the BSE Sensex rose 358.79 points or 0.51% to 70,865.10 and the CNX Nifty was up by 104.90 points or 0.50% to 21,255.05.

Above views are of the author and not of the website kindly read disclaimer