27 Dec 2024

Markets Set for Cautious Start Amid Mixed Global Cues

Indian equity markets concluded Thursday's session on a flat note after a day of volatility, influenced by a lack of significant domestic or global triggers. Today, markets are expected to open cautiously, reflecting mixed global signals in a holiday-thin trading environment.

Key Highlights:

  1. Positive Growth Outlook:

    • The Finance Ministry, in its monthly review, expressed optimism about India's economy growing at 6.5% in FY25.

    • Resilient rural demand and a pick-up in urban consumption are driving a bright outlook for the October-December quarter.

  2. Market Capitalization Surge:

    • India's market capitalization increased by 18.4% in 2024, reaching $5.18 trillion, ranking third globally among major markets in growth.

  3. FIIs Continue Selling:

    • Foreign Institutional Investors (FIIs) sold equities worth ₹2,376.67 crore on December 26, raising concerns.

  4. Rupee Depreciation Impact:

    • The Indian rupee's 2.34% depreciation against the US dollar in 2024 could add $15 billion to the import bill.

  5. Sectoral Insights:

    • Hospitality: Branded hotels may see revenue growth of 13-14% in FY25, driven by strong demand, according to Crisil Ratings.

    • Banking: RBI’s annual report highlighted a continued rise in net profits for commercial banks and a decline in bad loans for the sixth straight year.

    • Healthcare: The sector is expected to reach $320 billion by 2028, with significant growth projected in pharmaceuticals and biotechnology.

    • NBFCs: The RBI advised NBFCs to diversify funding sources as reliance on banks remains high.

  6. IPO Activity:

    • Several IPOs, including Mamata Machinery, DAM Capital Advisors, and others, are set to list on the exchanges.

Global Market Trends:

  • US Markets: Closed mostly in the red on Thursday amidst light post-Christmas trading.

  • Asian Markets: Trading mixed on Friday, with Japan leading gains due to yen weakness.

Back Home:

  • Thursday’s Performance:

    • BSE Sensex fell marginally by 0.39 points to 78,472.48.

    • CNX Nifty gained 22.55 points or 0.10%, closing at 23,750.20.

  • The Indian economy shows signs of recovery from the Q2 slowdown, supported by festival-driven activity and robust rural demand, as per the RBI bulletin. However, subdued FDI inflows and continued FII selling weighed on sentiment.

Markets remain cautious but are supported by positive growth signals in specific sectors.