Markets likely to start new financial year on positive note backed by strength in Asian peers

Indian markets posted solid gains on the last day of FY24 and extended the winning run on the second consecutive session on Thursday led by buying across the sectors. NSE and BSE were closed for trading on Friday on account of Good Friday. Today, markets are likely to start the new financial year (2024-25) on a positive note backed by strength in Asian peers. Investors will keep close eye on the upcoming the RBI policy meet foe more directional cues. RBI will conduct the first monetary policy meeting of the new fiscal 2024-25 from April 3-5, 2024. Sentiments will get a boost after Finance Minister Nirmala Sitharaman said India's gross domestic product (GDP) is on track to grow by 8 percent or more in the quarter ended March 31. Sitharaman added the economy is expected to show the same rate of year-on-year expansion for the 2023/24 financial year, citing the impact of improved inflation management and macroeconomic stability. Traders will be getting encouragement as growth in output of the eight key infrastructure sectors - known as the core sector - rose to a three-month high of 6.7 per cent year-on-year (Y-o-Y) in February from 4.1 per cent in January. According to data released by the Ministry of Commerce and Industry, output accelerated in sectors like crude oil (7.9 per cent), refinery products (2.6 per cent) and electricity (6.3 per cent). Some optimism will also come as India's executive director at International Monetary Fund (IMF) Krishnamurthy Venkata Subramanian said Indian economy can grow at 8 per cent till 2047, if the country can redouble the good policies that it has implemented over the last 10 years and accelerate reforms. Some support will come with a report that foreign investors made a strong return by injecting more than Rs 2 lakh crore into Indian equities in 2023-24, driven by optimism surrounding the country's robust economic fundamentals amidst a challenging global environment. Besides, provisional data from the NSE showed that foreign institutional investors (FIIs) net bought shares worth Rs 188.31 crore on March 28. However, some cautiousness may come as the government data showed that India's fiscal deficit between April and February of FY24 stood at Rs 15.01 lakh crore, and was around 86.5 per cent of the target for the entire financial year. The fiscal deficit in the same period a year ago stood at Rs 14.53 lakh crore. There will be some buzz in banking sector stocks as Care Ratings in the report said the gross non-performing assets (GNPA) of the Indian banking system are set to improve further to up to 2.1 per cent by the end of FY25. It added GNPAs are likely to come at 2.5-2.7 per cent in FY24 and will improve further to 2.1-2.4 per cent by the end of FY25. Metal industry stocks will be in limelight as Icra said domestic demand growth for non-ferrous metals such as aluminium and copper is likely to remain at 10 per cent in the next financial year. It noted the apparent consumption growth for non-ferrous metals in the domestic market remained at 10-13 per cent in the first nine months of the ongoing fiscal supported by the government's push on infrastructure development and encouraging demand from renewables sectors and electric vehicles. Automobile industry stocks will be on traders’ radar owing to the monthly sales report.

The US markets ended mostly in green on Thursday as investors digested the latest batch of economic data while looking towards the next inflation reading. Asian markets are trading mostly higher on Monday after China reported expansion in its manufacturing activity in March, a first since September.

Back home, extending winning momentum for second straight day, Indian equity benchmarks ended the last trading day of the financial year 2023-23 (FY24) on a firm note, with Sensex and Nifty recapturing their crucial psychological levels of 73,600 and 22,300, respectively. Markets made a gap up opening and continuously strengthened for most part of the session as traders took encouragement with Union Finance Minister Nirmala Sitharaman’s statement that the government will continue the push on its reforms agenda in its third term since political continuity, along with a predictable and stable economic environment and taxation structure, is important to achieve the laid-down developmental goals. Some support also came with provisional data from the NSE showing that foreign institutional investors (FIIs) net bought shares worth Rs 2,170.32 crore on March 27, 2024. Local bourses extended gains in afternoon deals, taking support from Chairman of the 16th Finance Commission Arvind Panagariya’s statement that India can realistically push its economic growth close to 9 per cent from the current 7 per cent or so, by implementing a few more reforms in the next five years. Traders also took a note of the Finance Ministry’s statement that the Centre plans to raise Rs 7.5 lakh crore through market borrowing in the April-September period of 2024-25 (H1FY25) to fund the revenue gap. In the next financial year (FY25), the government plans to borrow a total of Rs 14.13 lakh crore. Sentiments remained positive amid reports that India's central bank will keep building its forex reserves as it seeks to build larger buffers, and strong inflows into the country's equity and debt markets give it an opportunity to do so. However, markets trimmed some gains in final hour of trade but managed to close in green terrain. Finally, the BSE Sensex rose 655.04 points or 0.90% to 73,651.35 and the CNX Nifty was up by 203.25 points or 0.92% to 22,326.90.