Markets likely to get cautious start on Thursday

Indian markets closed higher on Wednesday, as cooling inflation and buying in PSU bank, power and information technology stocks saw the Sensex vault pass 60,000 after more than four months. Today, markets are likely to make cautious start mirroring weak global cues. Some cautiousness may come as former deputy chairman of the erstwhile Planning Commission Montek Singh Ahluwalia said it would be unrealistic to assume that India would record a sustained growth of 8 per cent, which is needed to become a developed nation by 2047. However, some respite may come later in the day as the ministry of statistics and programme implementation in its final Annual Survey of Industries (ASI) said manufacturing sector investments grew 20.9% in 2019-20 over the previous fiscal. Traders may take note of report that with RBI hiking the lending rate, the Union Cabinet earmarked Rs 34,856 crore towards the interest subvention scheme to help banks provide short term agriculture loans of up to Rs 3 lakh at a rate of 7 per cent. Information and Broadcasting Minister Anurag Singh Thakur said the Cabinet has decided to restore interest subvention on short term agriculture loans to 1.5 per cent for all financial institutions. Besides, foreign institutional investors (FIIs) have net bought shares worth Rs 2,347.22 crore on August 17, as per provisional data available on the NSE. Meanwhile, the Union Cabinet has approved a proposal to increase the limit of the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs. 50,000 crore to Rs. 5 trillion. The additional amount is being earmarked for entities in hospitality and related sectors. There will be some buzz in coal industry stocks as union coal minister Pralhad Joshi said the ministry of coal is targeting production of 900 million tonne (MT) this financial year and national miner Coal India would produce 700 MT coal. Telecom stocks will be in focus as data released by sector regulator Trai showed that telecom subscriber base in the country grew marginally to 117.29 crore in June with Reliance Jio adding maximum number of new customers. There were 117.07 crore subscribers in May 2022. There will be some reaction in oil and gas sector stocks as OPEC in its monthly oil report said that India's demand for petroleum products like petrol and diesel will grow by 7.73 per cent in 2022, the fastest pace in the world. It added that India's demand for oil products is projected to rise from 4.77 million barrels per day (bpd) in 2021 to 5.14 million bpd in 2022.

The US markets settled lower on Wednesday after minutes from the Federal Reserve's meeting in July suggested policymakers may be less aggressive than previously thought when they raise interest rates in September. Asian markets are trading mostly in red on Thursday following the broadly negative cues from global markets overnight, with weakness across most sectors.

Back home, Indian equity benchmarks extended up move for yet another session and gained over half a percent on Wednesday. Sensex past the psychological 60,000-mark and Nifty inched towards 18000 level on the back of softening inflation and strong FII buying in the current month. After the flat start, the benchmarks gradually inched higher as the day progressed, as traders took some encouragement as State Bank of India's (SBI) Chairman Dinesh Khara said that things might get better on the inflation front towards the end of September. He said the supply side constraints getting addressed and crude oil prices trending low will help ease the situation. Some support also came in as Moody's Analytics in a recent report on the Asia Pacific (APAC) region said global oil prices are expected to fall to almost $70 per barrel by the end of 2024. Domestic sentiments remained optimistic in late afternoon deals, amid a private report stating that companies in India are expected to give a salary hike of 10 per cent in 2023 as they struggle with rising attrition in the tight labour market. Some comfort also came as the UK India Business Council sees opportunities for trade, investment, and collaboration with India across financial technology (fintech), food and beverage, electric vehicle (EV), and other sectors. Traders took a note of a private report that the UK India Business Council sees opportunities for trade, investment, and collaboration with India across financial technology (fintech), food and beverage, electric vehicle (EV), and other sectors. Meanwhile, another private report stated that the Goods and Services Tax (GST) Council may make rate changes in some services or products and withdraw some exemptions in a bid to correct instances of inverted duty. Finally, the BSE Sensex rose 417.92 points or 0.70% to 60,260.13 and the CNX Nifty was up by 119.00 points or 0.67% to 17,944.25.