Benchmarks to start session on cautious note tracking lackluster global cues

Indian markets ended higher on Wednesday propelled by sustained inflows from foreign portfolio investors (FPIs) and gains in index heavyweights. Today, start of the session is likely to be cautious tracking lackluster global cues. There will be some volatility in the markets amid the weekly expiry of Nifty derivatives contract. Meanwhile, the Securities and Exchange Board of India (Sebi) has restrained 135 entities from accessing the securities market and directed them to impound around Rs 126 crore of wrongful gains from alleged market manipulation done through bulk SMSes. However, foreign fund inflows likely to aid domestic sentiments. Provisional data from the National Stock Exchange shows foreign institutional investors (FII) bought shares worth Rs 4,013.10 crore on June 21. Some support may come with a private report that India, given its huge market size and growth potential, is no longer an option for global companies but has turned into a key investment destination. Traders may take note of the World Economic Forum's annual Gender Gap Report, 2023 showing that India has ranked at 127 out of 146 countries in terms of gender parity -- an improvement of eight places from last year. The World Economic Forum (WEF) ranked India at 135 out of 146 countries in the Global Gender Gap Index in the report's 2022 edition. Real estate industry stocks will be in focus as a report by rating agency CRISIL stated that the residential real estate sector across the top six cities of India - Mumbai, Delhi NCR, Bengaluru, Pune, Kolkata, and Hyderabad - is expected to clock 8-10 per cent sales growth this fiscal year. It noted that buoyant residential demand across all segments has resulted in robust sales growth in the past two financial years. There will be some reaction in textile industry stocks as Union Minister Piyush Goyal urged the industry to collaborate and partner for research and development and innovation to jointly achieve greater strides in the textiles sector. Besides, the food ministry said the government’s rice procurement has reached 55.8 million tonnes so far in the ongoing 2022-23 marketing season, benefitting 1.22 crore farmers with MSP of Rs 1.7 lakh crore. Wheat procurement has reached 26.2 million tonnes so far in the 2023-24 rabi marketing year (April-March), more than the last year’s total procurement of 18.8 million tonnes.

The US markets ended lower on Wednesday as Fed Chair Jerome Powell hinted at further rate increases until inflation was tamed. Asian markets are trading mixed on Thursday mirroring overnight selling pressure on Wall Street.

Back home, Indian equity benchmarks ended higher for the second consecutive day on Wednesday, led by gains in Utilities, Power and Telecom stocks. After making a slightly positive start, markets soon gained some strength as traders took encouragement with the India Meteorological Department (IMD) stating that India’s stalled monsoon is likely to gain momentum in the next 3-4 days and could cover key rice, soybean, cotton and sugarcane growing regions in the southern, central and western states. Traders got some support as a labour bureau has said that retail inflation for farm workers and rural labourers eased to 5.99 per cent and 5.84 per cent, respectively, in May 2023. However, markets pared all the opening gains and traded lower in late morning deals, as some concern came with provisional data from the National Stock Exchange showing that foreign institutional investors (FII) sold shares worth Rs 1,942.62 crore on June 20. Some cautiousness also came as a private report said that though few fear a moderate rain deficit to impact inflation, an intense El Nino that severely disrupts the monsoon could push inflation up by 15-20 basis points by boosting food prices. But selling proved short-lived as markets once again moved to the green in afternoon deals, as some optimism came among traders with the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report showing that India created 1719998 new jobs in the month of April 2023. During 2022-23, EPFO has added 1.39 crore net members as compared to the net addition of 1.22 crore during 2021-22. Traders took a note of the World Economic Forum's annual Gender Gap Report, 2023, which said India has ranked at 127 out of 146 countries in terms of gender parity -- an improvement of eight places from last year. Meanwhile, the RBI said its recent instructions on ‘compromise settlements and technical write-offs’ have rationalised the existing regulatory guidance to banks and tightened some of the related provisions to ensure greater transparency. Finally, the BSE Sensex rose 195.45 points or 0.31% to 63,523.15 and the CNX Nifty was up by 40.15 points or 0.21% to 18,856.85.