Indian markets likely to open in green amid positive global cues; Nikkei rallies 2.3% as yen retreats

Indian markets retreated from record high levels and settled in the red on Wednesday, as traders opted to book some profits at higher levels, with IT stocks posting their sharpest drop in over six weeks. Today, markets are likely to get positive start following the US Federal Reserve’s decision to cut policy rates by a widely expected 50bps. The Federal Open Market Committee (FOMC) cut its policy rate by half a percentage point to a target range of 4.75% to 5%.

Foreign fund inflows are likely to aid sentiments. As per NSE data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth ₹1,153.69 crore. Sentiments will get boost as net direct tax collection grew 16.12% to over ₹ 9.95 trillion so far this fiscal on higher advance tax mop up.

However, there may be some cautiousness as State Bank of India (SBI) chairman C S Setty said that the Reserve Bank is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation. There will be some buzz in fertilizer industry stocks as the government approved ₹24,474.53 crore subsidy on phosphatic and potassic (P&K) fertilisers for the rabi season of 2024-25 to ensure supply of crop nutrients to farmers at affordable rates. The subsidy would be provided to the fertilizer companies as per approved and notified rates of N (nitrogen), P (phosphorus) and K (potash) so that fertilizers are made available to farmers at affordable prices.

Pharmaceutical stocks will be in focus as a report by CRISIL Ratings stated that the Indian pharmaceutical sector is expected to see revenue growth of 8-10 % this financial year, driven by strong exports to regulated markets such as the US and Europe, a recovery in semi-regulated markets including Africa and Asia, and consistent domestic demand.

There will be some reaction in diamond sector stocks as think tank GTRI said India's diamond sector is facing a severe crisis as both imports and exports have sharply declined in the past three years, which has triggered defaults, factory closures, and widespread job losses. Meanwhile, Northern Arc Capital IPO, Arkade Developers IPO, and Western Carriers (India) IPO will close for subscription today.

The US markets ended lower on Wednesday after the U.S. Federal Reserve opted for a supersized cut in its first move to borrowing costs in more than four years. Asian markets are trading mostly in green on Thursday as traders assessed the Federal Reserve’s decision to cut interest rates by a half-percentage point.