Benchmarks likely to start new month on optimistic note

Indian markets extended their gains into third straight day on Monday as global markets bounced back. Today, markets are likely to start new month on optimistic note supported by steady foreign flows coupled with drop in crude oil prices. Foreign institutional investors (FIIs) net bought shares worth Rs 4,178.61 crore on October 31, according to the provisional data available on the NSE. Sentiments will get a boost as production of eight infrastructure industries that comprise the core sector recovered to grow at 7.9 per cent in September - a three-month high - owing to a favourable base and double-digit growth in output of fertilisers, cement, and electricity. Some support will come as Chief Economic Adviser V Anantha Nageswaran said India is expected to clock better growth than IMF’s projections next year aided by enhanced capital formation. Recently, the International Monetary Fund (IMF) projected 6.8 per cent real growth for this year and 6.1 per cent for next year for India. However, there may be some cautiousness as data released by the Controller General of Accounts showed that the Central government's fiscal deficit widened to Rs 6.20 lakh crore in April-September, accounting for 37.3 percent of the full-year target. Traders may be concerned as the government data showed that retail inflation for industrial workers rose to 6.49 per cent in September from 5.85 per cent in August 2022 mainly due to higher prices of certain food items. There will be some reaction in edible oil industry stocks with a private report that India increased the base import prices of crude and refined palm oil and crude soya oil, following a surge in prices in the global market. Sugar stocks will be in focus as cooperative body NFCSFL data showed that sugar production in India, the world's major producer, fell 14.73 per cent year on year to 4.05 lakh tonnes in the first month of the 2022-23 marketing season. There will be some reaction in gold industry stocks as the World Gold Council (WGC) said India's gold consumption in the months of October to December could fall by around a quarter from a year ago as inflation depresses rural demand. Auto stocks will be in limelight reacting to their monthly sales numbers to be out from today. Investors await more of financial results from India Inc for domestic cues, with Adani Ports, Tech Mahindra and Nykaa due to post their earnings later in the day.

The US markets ended lower on Monday as investor focus turned to the Federal Reserve's policy meeting this week. Asian markets are trading in green on Tuesday ahead of Australia’s central bank decision and the results of a private survey on Chinese factory activity.

Back home, Indian equity benchmarks extended their gains for third straight day and settled with gains of over a percent on Monday, tracking gains in Asian equities and a fall in oil prices. Markets started the week on a robust note amid steady foreign flows. Foreign institutional investors (FIIs) net bought shares worth Rs 1,568.75 crore on 28 October, according to the provisional data available on the NSE. Sentiments got a boost as Union Minister for Commerce and Industry Piyush Goyal said that foreign trade would become a truly defining feature that would help India become a $30 trillion economy in the Amrit Kaal. Some support also came with a private report that India is expected to surpass its tax collection goal by more than Rs 2 lakh crore ($24.3 billion) in the current fiscal year. Key gauges added gains in late afternoon session, taking support from the prime minister Narendra Modi’s statement that India has become a major manufacturing hub and a new saga of economic reforms is being written in the country as his government's policies are 'stable, predictable and futuristic'. Traders overlooked data released by Reserve Bank of India showing that India's foreign exchange (forex) reserves declined $3.8 billion to $524.5 billion for the week ending October 21. Reserves are at their lowest levels since July 2020. Since last year, reserves have declined by $115 billion. Meanwhile, Union finance minister Nirmala Sitharaman has asked states to adopt a multi-modal approach and ensure logistics did not become a burden on exporters. She said the PM Gati Shakti was a beautiful protocol with which a synergy could be brought in. She also said the commerce ministry was working on getting an export policy that would help the exporters by giving them incentives and promoting many things. Finally, the BSE Sensex rose 786.74 points or 1.31% to 60,746.59 and the CNX Nifty was up by 225.40 points or 1.27% to 18,012.20.