Indian markets recovered from early losses and closed higher on Monday, driven by a rally in blue-chip stocks such as ICICI Bank, HUL, and HDFC Bank. Today, markets are expected to open in green, supported by a strengthening global sentiment ahead of the upcoming Federal Reserve policy meeting scheduled for next week. Traders may take note of a statement by Union Minister of State for Commerce and Industry Jitin Prasada, who said that India is revising Free Trade Agreements (FTAs) with South Korea, Malaysia, and other ASEAN countries to benefit domestic industries. He also stressed the need to boost exports, reduce import dependence, and ensure economic growth.

Meanwhile, in Tokyo, Japan’s Vice Minister of Finance for International Affairs, Atsushi Mimura, and India’s Secretary of Economic Affairs, Ajay Seth, held the 2nd India-Japan Finance Dialogue. The discussions focused on promoting financial cooperation and strengthening bilateral relations. Additionally, the Securities and Exchange Board of India (SEBI) has introduced new regulations for Foreign Venture Capital Investors (FVCIs), aligning them with rules for Foreign Portfolio Investors (FPIs), thus bringing greater parity between the two investor classes.

There is likely to be some movement in auto component stocks as Commerce Minister Piyush Goyal expressed confidence that the sector would reach $100 billion in exports by 2030, positioning it as one of the largest job creators in India. Insurance company stocks will also be in focus after the GST Council, led by Finance Minister Nirmala Sitharaman, decided to form a Group of Ministers (GoM) to explore lowering the tax rate on life and health insurance. In the chemical sector, stocks could see a reaction to a report from the Agro Chem Federation of India (ACFI) and EY, which suggests that India’s agrochemical exports could exceed Rs 80,000 crore over the next four years, given a favorable business environment. Meanwhile, organized gold jewelry retailers are expected to see revenues surge by 22-25% this fiscal year, driven by the recent reduction in gold import duties as outlined in the July Budget, according to a Crisil report.

In the U.S., markets ended higher on Monday as investors sought bargains after the previous week’s sell-off. Investors are now awaiting inflation reports in the coming days and next week’s Federal Reserve policy decision. Asian markets traded mostly in green on Tuesday, following Wall Street’s rally, although concerns over China’s still-struggling economy kept sentiments cautious.

Back in India, equity benchmarks bounced back from early lows and closed higher on Monday, led by gains in FMCG, banking, and consumer durables stocks. Markets opened on a weak note and saw volatility in the first half of the session due to concerns about a potential recession in the U.S. following weaker-than-expected jobs data. There was also caution as Foreign Institutional Investors (FIIs) offloaded Rs 620.95 crore worth of equities on Friday. Additionally, traders remained on the sidelines ahead of key data on India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP), both due later in the week. However, the markets stabilized in the second half, closing in green as the Reserve Bank of India (RBI) reported a $2.299 billion increase in India’s foreign exchange reserves, which reached $683.987 billion for the week ending August 30. In the previous week, forex reserves had surged by $7.023 billion to $681.688 billion. 

Further support came from a private report suggesting that food inflation, which has moderated recently, is expected to decline further in the coming months due to the progressing southwest monsoon and adequate water levels in reservoirs across regions. Additionally, Commerce Minister Piyush Goyal suggested establishing a working group on tourism between Mediterranean nations and India to explore cooperation and mutual benefits in this sector. 

Finally, the BSE Sensex rose by 375.61 points or 0.46% to close at 81,559.54, while the CNX Nifty was up by 84.25 points or 0.34% to settle at 24,936.40.