Markets likely to get positive start ahead of first advance estimates GDP for FY25

Indian markets ended the week's first trading session lower, settling down by over 1 per cent each, worst single-day decline in three months, dragged by selling pressure across the counters. Today, markets are likely to get positive start after previous session’s sell-off on account value buying at reduced levels. Investors would keep their eyes peeled for the first advance estimates of gross domestic product (GDP) for FY25, on tap today. Traders will be taking encouragement with Prime Minister Narendra Modi’s statement after US National Security Advisor Jake Sullivan met him that the India-US comprehensive global strategic partnership has scaled new heights, including in areas of technology and defence. He added look forward to building upon this momentum in ties between our two democracies for the benefit of our people and global good. Besides, the finance ministry has suggested that banks and non-banking financial companies (NBFCs) increase their participation in financing large-scale infrastructure initiatives, which are crucial for India’s ambition to achieve developed nation (Viksit Bharat) status by 2047. Meanwhile. the Securities and Exchange Board of India (Sebi) has relaxed settlement norms for brokerage accounts remaining inactive for more than 30 days. Brokers will now have to return the money lying in such idle accounts on a pre-decided settlement date every month. However, there may be some cautiousness amid detection of human metapneumovirus (HMPV) in India. India has reported at least five cases of HMPV, which causes respiratory illness and was recently identified in China and Malaysia. Two cases were detected in Karnataka, two in Tamil Nadu, and one in Gujarat. Traders may be concerned amid the renewed weakening of the Indian rupee to a fresh all-time low of 86 against the US dollar comes in the backdrop of a resurgent dollar index. There will be some buzz in sugar stocks as Food and Consumer Affairs Minister Pralhad Joshi said the government will soon take a decision on increasing the minimum support price (MSP) of sugar. The MSP of sugar remains unchanged at Rs 31 per kg, a rate established in February 2019. However, industry bodies have demanded for an increase due to rising production costs and economic pressures faced by sugar mills. Gold related stocks will be in focus as the World Gold Council said global central banks remained active in the gold market in November 2024, collectively adding 53 tonnes of the precious metal to their reserves. India’s year-to-date purchased 73 tonnes of gold with total gold reserves of 876 tonnes as on November end, making it the second-largest buyer of 2024 after Poland.

The US markets ended mostly higher on Monday after President-elect Donald Trump denied a newspaper report that his incoming administration would likely pursue a less-aggressive tariff policy than he previously threatened. Asian markets are trading mixed on Tuesday following a tech rally on Wall Street that saw the S&P500 and Nasdaq Composite post back-to-back gains.

Back home, Indian equity benchmarks faced intense selling pressure and ended lower on the second consecutive session on Monday due to an across-the-board selloff. The decline also came after three cases of Human Metapneumovirus (HMPV) were detected in the country. Markets opened mildly in the green however witnessed follow through selling pressure as a cautious undertone prevailed after foreign portfolio investors continued their selling spree and investors wait for cues from the Q3 earnings season, beginning with TCS this week. Foreign institutional investors (FIIs) offloaded Rs 4,227.25 crore in the capital markets on a net basis on Friday, according to exchange data. Traders were concerned after India’s foreign exchange reserves continue to decline, extending downhill journey for three months now. Data from the Reserve Bank of India (RBI) showed, in the week that ended December 27, the country’s foreign exchange kitty declined by $4.112 billion to $640.279 billion. The selling pressure intensified during the second half of the session amid a private report stated that India's current account deficit (CAD) is expected to remain elevated in FY26 due to stringent global trade policies. The report highlighted that the country's imports have consistently outpaced exports, leading to a widening trade deficit. The risk of a further deterioration in India's trade balance due to sluggish exports, which will keep the country's current account deficit (CAD) elevated. Traders paid no heed towards report that India’s services sector witnessed a faster growth in the month of December, as demand buoyancy continued to drive new business inflows higher, which in turn supported output growth and prompted firms to recruit additional workers. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index surged to 59.3 in December from 58.4 in November. Finally, the BSE Sensex fell 1258.12 points or 1.59% to 77,964.99, and the CNX Nifty was down by 388.70 points or 1.62% to 23,616.05.