Indian equity markets are expected to open on a flat-to-positive note as investors keenly await Donald Trump's swearing-in as the 47th U.S. President. However, volatility may persist due to stock-specific activity, as the corporate earnings season for the December quarter is underway. Market participants will closely monitor quarterly results and management commentaries.

Key Highlights for the Market Today:

1. IMF Maintains India’s Growth Forecast at 6.5%
   The International Monetary Fund (IMF) has retained its projection for India’s GDP growth at 6.5% for FY26 and FY27, signaling steady economic prospects.

2. Demand to Drive Economic Recovery Amid Inflation Concerns
   The Reserve Bank of India (RBI) noted in its latest bulletin that India’s economic growth is set to rebound, supported by robust domestic demand. However, persistent food inflation requires careful observation.

3. Net FDI Inflows Decline Sharply
   Net Foreign Direct Investment (FDI) dropped significantly to $0.5 billion between April and November 2024, compared to $8.5 billion during the same period in 2023, driven by higher repatriation and increased overseas investments by Indian firms.

4. Forex Reserves Hit 10-Month Low
   India’s foreign exchange reserves fell by $8.7 billion, reaching $625.9 billion for the week ending January 10, marking their lowest level in 10 months, according to RBI data.

5. Auto Stocks in Focus
   Union Minister Nitin Gadkari projected that India’s automobile sector will become the world’s largest in the next five years. The sector has already generated 45 million jobs, the highest among industries in the country.

Global and Domestic Market Trends:
On the global stage, U.S. markets closed higher on Friday, supported by optimism about the economy and interest rate trends ahead of Donald Trump’s new policies. Asian markets followed suit, with most indices trading in the green on Monday.

Back home, Indian markets ended Friday’s session under pressure, with the Sensex dropping 423.49 points (0.55%) to 76,619.33 and the Nifty falling 108.60 points (0.47%) to 23,203.20. Losses in heavyweights such as Infosys, Axis Bank, and Kotak Mahindra Bank dragged the indices lower.

Other Factors Impacting Markets:

• Weaker Rupee to Raise Import Costs: A weaker rupee is expected to push up India’s import bill for key commodities such as crude oil, gold, and machinery, as per think tank GTRI.
• Growth Forecast Lowered: Industry body FICCI reduced India’s growth projection for the current fiscal year to 6.4% from 7%, citing global uncertainties and a domestic slowdown.
• FII Outflows: Foreign Institutional Investors (FIIs) sold equities worth RS 4,341.95 crore on Thursday, according to stock exchange data.
• Rising U.S. Bond Yields: The surge in U.S. Treasury yields, with 10-year bonds nearing 5%, has contributed to uncertainty among domestic investors.

Investors will keep a close watch on corporate earnings, global cues, and macroeconomic indicators to gauge market direction.