The first day of FY24 is likely to begin on a positive note for domestic markets. According to analysts, amidst positive global cues, the return of foreign portfolio investors as buyers will help benchmarks sustain recovery.
Besides, macro numbers, such as GST collection and narrowing down of current-account deficit, are key positives, said analysts.
Even though Indian valuation continues to be relatively high, the recent market correction has made valuations a bit more reasonable than earlier, said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
SGX Nifty at 17,460 indicates a mildly positive opening for domestic markets. Most equities across the Asia-Pacific region are up over 0.75 per cent in early deal on Monday following a sharp rise in the US stocks last Friday.
“An important factor is the impressive turnaround in India’s CAD, which has improved substantially due to rising exports. The CAD, which was 4.4 per cent in Q2 FY23, has turned into a surplus in Q3 FY23. Therefore, the INR is likely to be stable, going forward,” he added.
Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Pvt Ltd, said, “The year GST was launched in 2017-18, ₹95,600 crore was the highest monthly collection. GST collected in March 2023, clocked the second highest-ever level at ₹1.60-lakh crore, as per the latest data released by the Govt. This reveals expanding consumption demand and re-endorses sustained buoyancy of the Indian market and the resilience of the Indian economy despite global headwinds.”
Global stocks remain resilient of late on hopes that US Fed will soon end its rate-hike cycle.
“There is a feeling among market participants that due to the recent banking crisis, financial conditions will tighten enough automatically and this will help the Fed dis-inflate without having to lift rates much further. The White House is pushing for stricter capital and liquidity-related regulations for mid-sized banks,” it added.
The stable rupee may restrain FPIs from turning aggressive sellers, said Vijayakumar, who added, “FPIs turning buyers in banking will help banking stocks scale higher levels assisted by good Q4 results.”
However, the late-night decision by Saudi Arabia and other oil-producing countries, including Russia, further oil output cuts of around 1.16 million barrels per day will keep crude oil price firm and may push central bankers into a tight spot, due to this inflationary move. Crude oil prices have already spurt $4 a barrel to nearly $84 (Brent).
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According to analysts, a series of holidays in domestic markets due to festivals in April will keep market interest low, said analysts.