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Indian markets slumped 1 percent on Wednesday, tracking negative cues from the global markets. Today, the markets are likely to recover from previous session’s fall with positive opening, tracking firm cues from global peers. Sentiments will get a boost as Moody's Investors Service said it will upgrade India rating if there is an increase in growth potential and sustained decline in government debt. The US-based rating agency had on Tuesday raised India's sovereign rating outlook to stable, from negative, while affirming the Baa3 rating - which is the lowest investment grade, just a notch above junk status. Traders may take note of report that Finance Minister Nirmala Sitharama said India is very close to arriving at the specifics of the two-pillar taxation proposition at the G20 and is in the last stage of finalising the details. Though, weekly F&O expiry will likely keep the markets volatile. There may be some cautiousness as India recorded a spike of 22,617 new Covid-19 cases in the past 24 hours. The country also witnessed 315 deaths, taking the death toll to 449,883. So far, India has recorded 33,893,002 corona cases in total. Meanwhile, SEBI has tweaked the norms pertaining to minimum percentages of monthly trades to be carried out by mutual funds on the Request For Quote (RFQ) platform of stock exchanges. Telecom stocks will be in focus as a licence amendment note issued stated that the Department of Telecom has slashed performance and financial bank guarantee requirement of telecom operators by 80 per cent. Additionally, the government has notified its decision to permit 100 per cent FDI under automatic route in the telecom services sector. There will be some buzz in aviation industry stocks as credit ratings agency Icra said India's domestic air passenger traffic grew marginally 2-3 per cent at around 69 lakh in September as compared to around 67 lakh in August. Textile industry stocks will be in limelight as the Union Cabinet approved the setting up of 7 Mega Integrated Textile Region and Apparel parks with a total outlay of Rs 4,445 crore for five years to position India strongly on the global textiles map.

The US markets ended higher on Wednesday as investors grew more optimistic that congressional Democrats and Republicans could reach a deal to avert a government debt default. Asian markets are trading in green on Thursday taking heart from a late recovery on Wall Street after US politicians appeared close to a temporary deal to avert a federal debt default and as Russia reassured Europe on gas supplies, calming volatile markets.

Back home, Indian equity benchmarks snapped a two-day gaining streak to end Wednesday's session nearly a percent lower mirroring losses in global markets as oil prices hit their highest level in seven years, fuelling concerns about rising inflation. Benchmark indices made a positive opening, as sentiments got a boost with Moody's Investors Service changed its outlook on India's sovereign ratings to stable from negative. Besides, it retained the ratings, both on foreign and domestic currencies, at Baa3. However, the benchmarks witnessed a sharp decline in the second half of the session with a spike in volatility coupled with profit booking at higher levels. Cautiousness also came after the Bombay Chamber of Commerce and Industry's survey found that an overwhelming number of exporters are worried about competitiveness as global trade picks up pace after the ravages of the pandemic. Sentiments remained down-beat in late hour of trading session, after the International Monetary Fund (IMF) expects global economic growth in 2021 to fall slightly below its July forecast of 6%, citing risks associated with debt, inflation and divergent economic trends in the wake of the Covid-19 pandemic. Traders took a note of Care Ratings’ report stated that the weighted average cost for borrowing across the states and maturities has risen to a two-month high of 6.91 per cent, up 6 basis points (bps) over the past week. According to the report, the rise in the yields of state bonds follows the uptick in yields of government securities (G-Secs) in recent days. Meanwhile, Reserve Bank's rate-setting panel started its three-day deliberations on the next bi-monthly monetary policy on Wednesday amid rising global commodity prices and the need to contain inflation at home. Finally, the BSE Sensex fell 555.15 points or 0.93% to 59,189.73 and the CNX Nifty was down by 176.30 points or 0.99% to 17,646.00.

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