Key drivers of Indian and global market performance: A week in review

The Indian market traded in a range with volatility for the week. The HSBC service PMI data for January came out around 61.8, ahead of estimates of 60, said Pantomath Capital Advisors in weekly IPO commentary.

The growth in service PMI is due to rising export and domestic new business orders, it said.

India will soon unveil a new scheme to incentivize electric vehicle purchases and expand charging infrastructure in line with the finance minister's interim budget announcement to accelerate eco-friendly transportation.

The program aims to spur localization of EV components while also boosting sales. Manufacturers sell discounted EVs and then seek the subsidized amount from the center. It's positive for the Auto & Auto ancillary sector, it said.

The RBI came out with their monetary policy decision. It kept all policy rates unchanged as expected. The repo rate, MSF, and SDF rates stand around 6.5%, 6.75%, and 6.25% respectively. It maintained the withdrawal of accommodation stance.

The RBI's GDP and CPI forecast are seen around 7% and 4.5% for FY25. Domestic economic activity remains strong. The first advance estimates (FAE) placed the real gross domestic product (GDP) growth at 7.3 percent for FY24, marking the third successive year of growth above 7 percent. CPI inflation is projected at 5.4 percent for FY24.

Looking at the global market, the US indices remained positive for the week, sustaining above-lifetime high levels. The US economy added 353K jobs in the month of January, nearly doubling the projected 180K, while the unemployment rate held steady at 3.7%, and wage growth unexpectedly accelerated, according to Pantomath Capital Advisors.

Pantomath Capital Advisors Managing Director Mahavir Lunawat said, “The strong nonfarm job data indicates resilience in the economy. Hopes of a policy rate cut in March are now almost ruled out. A Fed governor indicated that any rate cuts would happen more slowly than financial markets anticipate.

"They want to make sure inflation is consistently heading towards their 2% goal before making significant cuts. There is also earnings-specific volatility in the US market. Better-than-estimated earnings and positive guidance by many companies in the US are further strengthening the recent rally in equity markets.”

Brent crude oil traded in a thin range but remained positive for the week. Renewed tensions in the Middle East further stoked supply disruption fears and supported prices at lower levels.

Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire offer from Hamas, although US Secretary of State Antony Blinken said there was still room for negotiation.

Investors also remained wary of potential further US military actions against Iranian forces and their allied militias. Geopolitical tensions continue to weigh on crude oil prices in the near term.

Pantomath Capital Advisors noted in their primary market update that the surge in domestic capital influx, robust growth of Indian entrepreneurial endeavours, advancements in governance standards, and the active engagement of conscientious institutional investors collectively contributed to the sustained momentum expected in the IPO market throughout 2024.

This week, commencing February 22nd, four mainboard IPOs Appejay Surrendra Park Hotels, Rashi Peripherals, Jana Small Finance Bank and Capital Small Finance closed to raise a cumulative of 2,613 crores,

Anticipation is high for the upcoming week, with 2 mainboard IPOs scheduled to hit the street to raise 1672 crores, the commentary noted, the report said.