Indian markets scaled their highest closing levels in a month for a second straight day on Thursday amid gains across most sectors, led by financial and IT shares. Today, markets are likely to extend their bull run with gap-up opening mirroring firm global cues. Sentiments will get boost as Economic Affairs Secretary Ajay Seth said the measures taken by Reserve Bank of India (RBI) will increase inflows of overseas funds and help in strengthening the rupee against the US dollar. RBI on Wednesday raised the overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows. Besides, Finance Minister Nirmala Sitharaman has asked the Niti Aayog to prepare a report mapping all the industrial activities such as corridors, logistics parks and pharma hubs so that they can be incorporated under the PM Gati Shakti initiative of the government. Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has asked state governments to find out effective ways to address the issues related to debt and cash management. There will be some buzz in the insurance industry stocks with a private report that the life insurance industry has reported a meagre growth of 4.15 per cent in new business premiums in June, mainly due to the contraction in Life Insurance Corporation (LIC) premiums. However, in the April-June quarter (Q1FY23) life insurers saw their new business premiums (NBP) rise by 40 per cent over the same period a year ago, on account of lower base. IT industry stocks will be in focus as ratings agency Crisil said the information technology services sector will see a sharp fall in revenue growth to 12-13 per cent in FY23 from 19 per cent in FY22. However, it said the current depreciation in the rupee, strong demand for new age technologies like artificial intelligence, cloud computing and Internet of Things will help the over $220-billion sector maintain a double digit growth. There will be some reaction in power stocks as Union minister R K Singh said coal import for 10 per cent blending for the electricity plants to avoid blackouts will result in a rise in power tariff by 60-70 paise per unit. Investors will be eyeing corporate earnings report with the IT behemoth Tata Consultancy Services is likely to report June quarter 2022 (Q1FY23) earnings post market hours today. There are expectation that the IT services company to report a steady Q1 buoyed by deal wins and strong demand momentum.
The US markets ended higher on Thursday as fears of an economic slowdown cooled and sterling began to claw back recent losses following British Prime Minister Boris Johnson's decision to resign. Asian markets are trading in green on Friday following a strong session on Wall Street overnight.
Back home, Indian equity benchmarks ended higher for a second straight day and settled around a percent higher on Thursday, following positive trends in global markets. Domestic bourses made a gap up opening and stayed in green for whole day, as sentiments got a boost with the Reserve Bank of India (RBI) announced a series of measures to attract foreign flows in a bid to protect the local currency amid depleting foreign exchange reserves. India’s foreign exchange reserves have depleted by $38 billion to below $600 billion since the Russian invasion of Ukraine late February. Some optimism also came as Finance ministry released the fourth instalment of revenue deficit grant of Rs 7,183 crore to 14 states for the current fiscal. Markets remained firm in late afternoon deals, taking support from the principal economic advisor with the Department for Promotion of Industry and Internal Trade, Rupa Dutta’s statement that the government is working on to reduce compliance issues with a focus on ease of doing business and has introduced the Insolvency and Bankruptcy Code (IBC) keeping that in mind. Traders took some solace with private report stated that the slew of measures announced by Reserve Bank of India (RBI) to enhance foreign exchange inflows should help rupee to outperform its peers in emerging market economies. Additional support also came as Commerce and industry minister Piyush Goyal reviewed the progress of the implementation of the PM GatiShakti national master plan, which aims at giving a push to the country's multi-modal infrastructure network. Finally, the BSE Sensex rose 427.49 points or 0.80% to 54,178.46 and the CNX Nifty was up by 143.10 points or 0.89% to 16,132.90.
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