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Markets to get optimistic start on firm global cues; All eyes on Union Budget 2023
Feb-01-2023

Indian markets recovered from an early slide to end on a positive note on Tuesday, as oil extended losses on demand concerns and the International Monetary Fund sounded bullish on India's growth prospects. Today, markets are likely to get optimistic start tracking firm global cues. Sentiments will get a boost as the government data showed that production of eight infrastructure sectors rose at a three-month high of 7.4 per cent in December 2022 against 4.1 per cent in the same month of previous year on a better show by coal, fertiliser, steel, and electricity segments. Traders will be taking encouragement as the finance ministry said the GST collection in January surged to over Rs 1.55 lakh crore, the second highest-ever mop-up. Some support will come as Federation of Indian Export Organisations (FIEO) said increasing exports to markets such as Brazil, South Africa and Saudi Arabia are boosting the growth of the country's outbound shipments. However, there may be some volatility in the markets ahead of the Union Budget 2023 to be presented by Finance Minister Nirmal Sitharaman. Her Budget speech will be tracked closely for key announcements on areas such as railway, defence, education, social welfare, GDP, fiscal deficit, inflation, disinvestment, income tax and COVID. Meanwhile, the finance ministry data showed that the government's fiscal deficit as of End-December touched 59.8 per cent of the full-year Budget Estimate on subdued growth in revenue collections. Moreover, investors will be eyeing manufacturing PMI data to be out later in the day. There will be some buzz in two-wheeler company’s stocks with a private report that electric two-wheeler sales in the country are expected to grow to around 22 million by 2030 amid a demand for affordable transportation and the focus on reducing carbon emissions. Sugar stocks will be in focus as industry body ISMA said India's sugar production is estimated to fall 5 per cent during 2022-23 marketing year ending September to 340 lakh tonnes as more quantity of sugarcane juice is being diverted for production of ethanol. There will be some reaction in electronic goods company’s stocks as industry body India Cellular and Electronics Association (ICEA) said electronic goods export is likely to grow by 36.8 per cent to cross Rs 1.6 lakh crore in the current fiscal, with mobile phone export accounting for nearly half of the total pie. Auto stocks will be in limelight reacting to their monthly sales numbers. Investors will continue to keep eye on earnings from some companies including Britannia, Siemens, Ashok Leyland, Jubilant Foodworks, Tata Chemicals, Ajanta Pharma later in the day.

The US markets ended higher on Tuesday as labor cost data encouraged investors about the Federal Reserve's aggressive approach to taming inflation a day ahead of the central bank's critical policy decision. Asian markets are trading mostly in green on Wednesday following overnight rally on Wall Street.

Back home, in a highly volatile day, Indian equity benchmarks erased all of their initial losses to end marginally higher on Tuesday led by gains in PSU, Utilities and Industrials stocks. After a positive opening, the markets came under selling pressure in the first half as investors resorted to profit-taking ahead of the Union Budget announcement. Also, the US Federal Reserve meeting on interest rate decision overnight tomorrow prompted investors to take selective bets with a cautious stance. Traders were concerned with the International Monetary Fund’s (IMF) statement that it is expecting some slowdown in the Indian economy next fiscal year and projected the growth to 6.1 percent from 6.8 percent during the current fiscal ending March 31. Also, continuous foreign funds outflow played spoilsport for the markets. Foreign Institutional Investors (FIIs) offloaded shares worth Rs 6,792.80 crore on Monday, according to exchange data. However, a fag-end buying helped domestic markets stage turnaround in Tuesday's trade, after Finance minister Nirmala Sitharaman tabled Economic Survey 2023 in Lok Sabha. The 2022-23 Economic Survey said India is projected to grow at a baseline rate of 6.5 per cent and a range of 6-6.8 per cent in the coming 2023-24 (FY24) with the global macroeconomic slowdown being the key risk factor to the forecast. The baseline nominal GDP growth is forecasted at 11 percent. Growth is expected to be brisk in FY24 as a vigorous credit disbursal, and capital investment cycle is expected to unfold in India with the strengthening of the balance sheets of the corporate and banking sectors. Finally, the BSE Sensex rose 49.49 points or 0.08% to 59,549.90 and the CNX Nifty was up by 13.20 points or 0.07% to 17,662.15.
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