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Indian equity markets ended higher on Monday as the government data showed that the industrial output growth surprised in May rising to a seven month high of 5.9 percent from 5 percent in the previous month. Today, markets are likely to make slightly positive start on frim cues from US markets overnight. Some support may come in as Fed Chair Jerome Powell said that the central bank will not wait until inflation hits 2% to cut interest rates. Traders may get some support as  Reserve Bank of India (RBI) data showed India’s outward foreign direct investment (FDI) commitments rose to $2.14 billion in June 2024, compared to $1.14 billion in June 2023. There may also be some encouragement as Commerce and Industry Minister Piyush Goyal held discussions with potential investors in Zurich and informed them about huge investment opportunities in India. The minister is in Switzerland regarding implementation of the India-EFTA Trade and Economic Partnership Agreement (TEPA). There may also be some passiveness in markets amid foreign fund inflows. On July 15, foreign institutional investors (FIIs) purchased shares worth Rs 2,684.78 crore. Traders may take note of report that the Agriculture Ministry data showed farmers in India have sown Kharif crops across 575.13 lakh hectares so far this year, as against 521.25 lakh hectares in the same period of last year. On a yearly basis, the sowing is 10 per cent higher. Commodity-wise, paddy, pulses, oilseeds, sugarcane, and cotton sowing have been higher year-on-year. Traders may be some buss in oil producing industry related stocks as the government announced an increase in the windfall tax on domestically produced crude oil, raising it to Rs 7,000 per tonne from the previous Rs 6,000 per tonne.

On the global front, Asian markets are trading mostly in red in early deals on Tuesday with investors weighing the implications of a potential Trump presidency on China. The US markets ended higher on Monday as comments from the Federal Reserve fueled expectations of further rate cuts this year.

Back home, Indian equity benchmarks closed at new record closing high levels on Monday driven by positive expectations from the upcoming Union Budget, robust FII inflows, and better-than-expected results from the IT sector. Markets made a positive start and remained higher during the day, as traders took support with investment data from the National Securities Depository showing that the Foreign Portfolio Investment (FPI) in the Indian equity market increased by Rs 7,390 crore during the second week of July. The data also pointed out that the net investment by Foreign Portfolio Investors (FPIs) in July has increased to Rs 15,352 crore. Traders got encouragement as the government data showed that the industrial output growth surprised in May rising to a seven month high of 5.9 percent from 5 percent in the previous month, as manufacturing and electricity production soared. Some optimism also came as income tax department said India's net direct tax collections grew 19.54 percent to Rs 5.74 lakh crore till July 11 in the current financial year as compared to Rs 4.80 lakh crore in FY24 in the corresponding period. Sentiments remained positive in late afternoon deals, taking support from Commerce and Industry Minister Piyush Goyal’s statement that India's exports have recorded healthy growth in May and remained in the positive zone in June and the first quarter of the current fiscal despite global challenges. He also said that growth in the services sector is helping the country's outbound shipments to register positive growth rates. However, gains remained capped as some cautiousness came in after India’s retail inflation rose to four-month high of 5.08 percent in June compared with 4.75 percent in the previous month as food inflation galloped to 9.4 percent given the impact of heatwave on vegetables. Besides, wholesale inflation rose to a 16-month high of 3.4 percent in June, compared with 2.6 percent in the previous month. Wholesale food inflation was up 8.7 percent compared with 7.4 percent in the previous quarter. Finally, the BSE Sensex rose 145.52 points or 0.18% to 80,664.86, and the CNX Nifty was up by 84.55 points or 0.35% points to 24,586.70.

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