Markets likely to open in green on Friday

Indian markets rose around half a percent each on Thursday to extend gains for a fifth straight session as the corporate earnings season gathered steam. Today, markets are likely to open in green amid strong foreign inflows, sustained rally in the US markets, and easing crude oil prices. Foreign institutional investors (FIIs) have net purchased shares worth Rs 1,799.32 crore, continuing buying for the fourth consecutive session on July 21, as per provisional data available on the NSE. Traders may take note of Commerce Secretary BVR Subrahmanyam’s statement that negotiations for the India-UK free trade agreement will be concluded by August 31 and ready for signing by Diwali in October. However, there may be some cautiousness as the Federation of Indian Chambers of Commerce and Industry's (FICCI) quarterly survey showed that the Indian economy is expected to expand 7% in fiscal 2022/23, slower than a previous estimate of 7.4% and the central bank's 7.2% projection. The survey said the war in Ukraine is likely to keep inflation high and dent consumer demand. Also, the Asian Development Bank (ADB) has slashed its growth forecast for India to 7.2 per cent for FY23 from 7.5 per cent estimated earlier citing higher than anticipated inflation since April and subsequent monetary tightening by the central bank. Meanwhile, capital markets regulator Sebi has proposed a regulatory framework for the online bond platforms that are selling listed debt securities. Under the proposal, bond platforms should register as stock brokers (debt segment) with the Securities and Exchange Board of India (Sebi) or be run by Sebi-registered brokers. There will be some buzz in pharma industry stocks as the government launched three schemes to strengthen Micro, Small and Medium Enterprises (MSMEs) in the pharmaceutical sector. Union minister Mansukh Mandaviya noted that the schemes envisage technology upgradation, setting up of common research centres and effluent treatment plants in clusters for the pharma MSMEs. Banking stocks will be in focus as S&P Global Ratings said non-performing loans of banks are expected to decline to 5-5.5 per cent of the total advances by March 2024. There will be some reaction in preventive healthcare industry stocks with a private report stating that India’s preventive healthcare sector - fitness, wellness, foods and supplements, early diagnostics and health tracking - is projected to reach $197 bn by 2025, growing at a CAGR of 22 per cent. Investors awaited corporate earnings from India Inc for domestic cues, with Reliance Industries and UltraTech among the large-cap companies slated to report their financial results later in the day. Reliance Industries is likely to report strong earnings for the quarter ended June 30, 2022.

The US markets ended higher on Thursday after investors flocked to growth stocks. Asian markets are trading mostly in green with marginal gains on Friday after Japan’s inflation rose 2.2 per cent in June.

Back home, Indian equity benchmarks continued their winning momentum for the fifth consecutive day and settled with gains of over half percent on Thursday led by gains in telecom, capital goods and industrials stocks. After making cautious start, key gauges soon gained traction to trade in green, as traders took support with former Niti Aayog Vice Chairman Arvind Panagariya’s statement that Indian economy, which has grown fairly rapidly in the last 17 years, will grow at 7-8 per cent in the next couple of decades. Some support also came as rating agency ICRA’s report stated that the growth in assets under management (AUM) of non-banking financial companies (NBFCs) and housing finance companies (HFCs) is likely to be at 9-11 per cent in FY23 compared to a rise of 9.5 per cent in the last fiscal. Adding more optimism, Foreign Institutional Investors (FII) remained net buyers for the third day straight on Dalal Street on Wednesday. FIIs pumped in Rs 1,780 crore into domestic stocks. However, in the late afternoon deals, key gauges trimmed most of their gains as traders got anxious with a private report stating that India’s economic activity showed early signs of cooling off in June as acute price pressures, rising interest rates, and a falling rupee dampened sentiment after a strong showing the previous month. But, markets regained traction to end higher taking support from Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen. He attributed depreciation in rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve. Additional support also came after the labor ministry indicated that retirement fund body EPFO added 16.82 lakh, new subscribers, in May 2022, nearly 83 percent more than 9.2 lakh enrolled in the year-ago month. Finally, the BSE Sensex rose 284.42 points or 0.51% to 55,681.95 and the CNX Nifty was up by 84.40 points or 0.51% to 16,605.25.