Domestic indices likely to get flat-to-positive start

Indian markets ended at new record highs on Thursday, after struggling for direction initially, as FMCG, bank and healthcare stocks were in demand. Today, domestic indices are likely to get flat-to-positive start amid mixed global cues. Marketmen will be taking some encouragement with healthy Q1FY24 results, and persistent FPI buying. provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) have bought shares worth Rs 3,370.90 crore on July 20. Some support will come with a private report that India is indeed likely to be a rising great power and its economy will have the size similar to that of the US by 2050. As per report, India should be able to sustain growth of GDP per head at 5 per cent a year, or so, up to 2050. With better policies, growth might even be a bit higher, though it could also be lower. Traders may take note of Germany's Vice Chancellor and Minister of Economic Affairs and Climate Action Robert Habeck’s statement that India and Germany want to further strengthen bilateral cooperation and increase investments and collaboration among companies. Separately, Union Minister Jyotiraditya Scindia said Japan is keen to make investments of around 5 trillion Japanese yen in India across various sectors including steel. Besides, the International Monetary Fund (IMF) has said India's expected inclusion in the international bond indices could significantly increase foreign participation in the country's bond market and support portfolio inflows to finance the current account deficit (CAD) over the medium term. However, a cautious undertone may prevail as investors await Reliance Q1 results along with details on Jio's financial listing later in the day. Traders may be concerned as latest payroll data released by the Employees’ Provident Fund Organisation (EPFO) showed that formal job creation slowed in May after recovering slightly at the turn of the fiscal year in the previous month. The number of new monthly subscribers under the EPF declined by close to 1 per cent to 883,176 in May from 891,974 in April. Meanwhile, Ultratech Cement, JSW Steel, HDFC Life, Hindustan Zinc, DLF, Vedanta, One97 Communications, Ashok Leyland, Federal Bank, among others will report the April-June quarter results for fiscal year 2023-24 (Q1FY24).

The US markets ended mostly in red on Thursday as investors reacted to disappointing earnings news from the likes of Netflix and Tesla and signs the labor market remains tight. Asian markets are trading mixed on Friday as investors digested Japan’s higher-than-expected consumer price index figures for June.

Back home, Indian equity benchmarks closed higher for the sixth straight session to settle at yet another fresh record closing highs on Thursday, driven by unabated foreign capital inflows and intense buying in FMCG, Banking and Healthcare stocks. After the initial dip, key indices traded volatile in the early hours as traders got anxious with S&P Global Ratings reportedly stating that India is unlikely to embark on any major new reforms till the 2024 elections, but momentum could pick up if the next government comes with a strong mandate. However, markets soon erased initial losses and turned positive in afternoon deals, as traders took support with World Bank President Ajay Banga’s statement that amidst risk of a global slowdown in the early part of next year, India is expected to remain shielded from its effects due to robust domestic consumption. Traders also took a note of a private report that India’s chances of missing the budget deficit target for this fiscal year is very slim at the moment despite weather hindrances, divestment revenue risks and meek corporate tax collections, thanks to support from the central bank. Markets added gains in late afternoon deals, as the Asian Development Bank (ADB) in its latest forecast has maintained the growth outlook for developing economies in Asia and the Pacific at 4.8 per cent for 2023, and noted robust domestic demand continues to support the region’s recovery. According to the Asian Development Outlook (ADO) July 2023, ADB forecasted that inflation in the region is expected to fall continuously, approaching pre-pandemic levels as fuel and food prices decline. Meanwhile, highlighting the transformative potential of the Indian EV industry and its positive impact on both the economy and the environment, NITI Aayog Vice Chairman Suman Bery has emphasized the role of electric mobility in accelerating India’s economic growth along low-carbon pathways and facilitating the nation's net-zero vision for 2070. Finally, the BSE Sensex rose 474.46 points or 0.71% to 67,571.90 and the CNX Nifty was up by 146.00 points or 0.74% to 19,979.15.