Indian markets ended higher on Tuesday for a seventh consecutive session with banks, auto and metal stocks leading the surge. Today, start of the session is likely to be cautious ahead of macro-economic data — consumer price index (CPI) and Index of Industrial Production (IIP) — due to be released later in the day and amid mixed moves across global markets. Traders will be taking encouragement as the India Meteorological Department (IMD), the state-run official weather agency, predicted ‘normal’ rains during this year’s monsoon season – June to September – at 96 per cent of the Long Period Average (LPA) in spite of the anticipated El Nino conditions. As per a private report, ample rains may boost production of crops like rice, soybeans, corn and sugar cane, helping to lower food prices and aiding the government’s efforts to cool inflation. However, there may be some cautiousness as the International Monetary Fund (IMF) slashed its economic growth forecast for India by 20 basis points (bps) to 5.9 per cent for 2023-24 (FY24), citing lesser scope for pent-up demand due to historical revisions to data. The IMF also projected India’s retail inflation to ease to 4.9 per cent in FY24 from 6.7 per cent in FY23, and the current account deficit to come down to 2.2 per cent of GDP from an estimated 2.6 per cent a year ago. Traders may be concerned with private report that India’s private equity (PE) investment stood at $2,172 million in the first quarter of calendar year 2023, down 75.4 per cent from $8,830 million in Q1 of CY 2022. The investments declined 31.9 per cent sequentially. Sugar stocks would be in focus with a private report that prices of the commodity in the global markets are soaring. There will be some reaction in power industry stocks as rating agency CRISIL said due to unprecedented rainfall, demand for power in India fell 1.3 per cent in March. This fall in demand also led to a fall in power generation by 7 per cent year-on-year (YoY) in the month. Moreover, market participants on Dalal Street await the announcement of financial results by Tata Consultancy Services (TCS), due later in the day, for domestic cues. The Tata group IT giant is all set to kick off the corporate earnings season post-market hours.
The US markets ended mostly in red on Tuesday after the International Monetary Fund cut its global growth forecast and warned it was too soon to sound the all-clear from the banking turmoil. Asian markets are trading mixed on Wednesday as investors await U.S. inflation data to gauge near-term trajectory for interest rates.
Back home, rising for the seventh straight session, Indian equity benchmarks ended with gains of over half percent on Tuesday propelled by robust buying in Metal, Utilities and Banking stocks. On the back of positive Asian cues, the Indian indices started on a firm note and extended the gains as the day progressed. Traders got encouragement as India Ratings said the share of combined capex of states in the GDP may improve marginally to 2.8% in FY24 from 2.5% in FY23. Some support also came with Union Finance Minister Nirmala Sitharaman’s statement that India's structural reforms approach has ensured that it remains a globally attractive destination for investment and the country is well-positioned in the global economy, allowing it to grow briskly, possibly faster, in the coming years. However, key gauges erased most of their initial gains in late afternoon deals as traders turned cautious amid report that a private weather forecaster predicted ‘below normal’ monsoon in India in 2023 on account of El Nino conditions. Investors also remained on sidelines ahead of India's consumer price index (CPI) and Index of Industrial Production (IIP) data along with US CPI data. But, markets regained traction to end higher amid continuous foreign fund inflows. Foreign Portfolio Investors (FPIs) further bought equities worth Rs 882.52 crore on Monday, according to exchange data. Besides, expectations of healthy fourth-quarter earnings, easing inflation, a pause in rate hikes by the RBI, the return of foreign portfolio investors and improving macroeconomic indicators have underpinned market sentiments. Traders took note of report that India's G20 sherpa Amitabh Kant said India will use the G20 narrative to push its digital transformation story to the rest of the world with an objective of transforming the lives of people in the Global South. Finally, the BSE Sensex rose 311.21 points or 0.52% to 60,157.72 and the CNX Nifty was up by 98.25 points or 0.56% to 17,722.30.
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