Indian markets ended Wednesday on a high note, buoyed by gains in European and Asian equities ahead of the anticipated US Federal Reserve's interest rate decision. Today, markets are expected to open positively, tracking global peers' performance. Investors are optimistic following Commerce and Industry Minister Piyush Goyal's comments on India's potential to become a $55-trillion economy by 2047, emphasizing self-sufficiency, technology, stronger currency, and manufacturing quality. Further support comes from Finance Minister Nirmala Sitharaman, highlighting the balanced budget aimed at boosting local manufacturing, employment, and India's global economic share.

Recent data from the Controller General of Accounts (CGA) reveals a significant reduction in the central government's fiscal deficit to 8.41% of the annual target for Q1 FY25, driven by decreased capital expenditure during election months and high dividends from the RBI. In contrast, the deficit for the same period in FY24 was 25.3% of the target.

However, continuous foreign fund outflows may dampen sentiment, as FIIs sold Rs 3,462 crore worth of equities on July 31. Additionally, India's eight key infrastructure industries grew by only 4% year-on-year in June, the slowest in 20 months, due to a high base effect and reduced electricity demand during the monsoon.

Investors will closely watch the Manufacturing PMI data for further market direction. Metal stocks may be under scrutiny after China's manufacturing activity contracted for the first time in nine months in July, as per the Caixin PMI, which dropped to 49.8 from June's 51.8. The government's decision to cut the windfall tax on domestically produced crude oil to Rs 4,600 per tonne and keep the tax on diesel and aviation turbine fuel exports at nil will also affect the oil & gas and aviation sectors.

In the US, markets closed higher on Wednesday after Federal Reserve Chair Jerome Powell hinted at a potential interest rate cut in the upcoming meeting, contingent on easing inflation data. Asian markets are trading mostly positive on Thursday, buoyed by Powell's comments.

Domestically, Indian equity benchmarks saw notable gains on Wednesday, with the Sensex and Nifty closing over 0.30% higher, driven by anticipation of the Federal Reserve's policy decision. Optimism was fueled by expectations of more stimulus from Beijing to support its struggling economy. Positive sentiment was also bolstered by the government's Rs 98,681 crore revenue from long-term capital gains tax on listed equities in 2022-23, a 15% increase over the previous year. Strong trading continued, supported by heavy buying in Utilities and Power sectors.

India Ratings & Research (Ind-Ra) revised India's GDP growth forecast for the current fiscal year to 7.5%, up from 7.1%, citing improved consumption demand and ongoing growth momentum driven by government capital expenditure. The market remained optimistic, supported by Commerce and Industry Minister Piyush Goyal's announcement of incentives worth Rs 9,721 crore under the PLI scheme for nine sectors, including electronics manufacturing and pharmaceuticals.

Finally, the BSE Sensex rose by 285.94 points or 0.35% to 81,741.34, and the CNX Nifty increased by 93.85 points or 0.38% to 24,951.15.