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Indian markets closed higher for the fourth consecutive session on Tuesday after yet another day of volatile trade, supported by PSU bank, metal, FMCG and auto names. Today, the start of session is likely to be flat-to-positive following mixed trends in the global markets. Investors may react positively to macro-economic data released yesterday after market hours. The government data showed India's retail inflation eased again in September, falling to a five-month low, thanks to a favourable comparison with last year and moderating food prices that offset a surge in the cost of crude oil and fuel. The government data also showed that the Index of Industrial Production has risen 11.9% year-on-year for the month of August as against 11.5% in July. As per the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector's output surged 9.7% in August 2021. Traders will be taking encouragement as the International Monetary Fund (IMF) has retained its projection for India’s economic growth in the current financial year at 9.5 per cent, even as it has moderately scaled down its forecast for the world economy during 2021 by 10 basis points to 5.9 per cent in view of worsening Covid dynamics and supply disruptions. Meanwhile, The Centre has asked thermal power generators to import coal for at least 10 per cent blending, citing shortage of domestic coal supply. This is a sharp reversal of its earlier directive of using domestic coal. Telecom stocks will be in limelight as in line with its bold reform agenda for telecom, the government notified that for future spectrum auctions, the need for submission of financial bank guarantee (FBG) to securitise annual spectrum instalment has been done away with. There will be some buzz in the fertilizer industry stocks as the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved nutrient-based subsidy rates for phosphatic & potassic fertilisers for FY22. Net subsidy for the rabi season to be at Rs 28,665 crore. Sugar industry stocks will be in focus as Icra's report stated that Sugar companies' revenue is likely to grow by 5-7 per cent in 2021-22, following firm domestic and global prices and expected growth in both sugar exports and ethanol volumes. There will be some reaction in NBFCs stocks as Crisil stated that Assets under management of gold loan-focussed Non-Banking Financial Companies (NBFCs) are likely to grow 18-20 per cent to Rs 1.3 lakh crore this fiscal on higher demand for such loans. There will be lots of earnings announcements too, to keep the markets in action, mainly Infosys and Wipro.

The US markets ended lower on Tuesday as investors grew more jittery in the run up to third-quarter earnings. Asian markets are trading mixed on Wednesday following weakness on Wall Street.

Back home, Indian equity benchmarks recovered the day's losses to end a choppy session at record closing levels for second straight session on Tuesday, led by Consumer Durables, Consumer Discretionary, FMCG and Metal stocks. For most part of the day, benchmarks traded on a subdued note, as traders remained cautious after the World Bank said that the debt burden of the world's low-income countries rose 12% to a record $860 billion in 2020 as countries responded to the COVID-19 crisis with massive fiscal, monetary, and financial stimulus packages. Some pessimism also came as data complied by the Centre for Monitoring Indian Economy (CMIE) showed led by a sharp 249 percentage point rise in rural joblessness rate, India's unemployment rate shot up to 8.86% for the week ended October 10 compared with 7.56% a week earlier. Traders also took a note of private report stated that the Reserve Bank is likely to change the stance of its monetary policy and hike rates from the first quarter of 2022. It said the central bank will start with liquidity normalization moves this month, narrowing the difference between the rate at which it funds the system and at which it absorbs excess liquidity in December. Investors also awaited the latest batch of earnings as well as industrial output and CPI inflation figures for directional cues. However, late hour buying lifted the benchmarks to close at record highs. Traders also found some support with industry body PHDCCI stating that the economy is poised to achieve 10.25 per cent GDP growth in FY 2021-22 on the back of effective government policies, Reserve Bank’s accommodative policy stance and improved business sentiments. Some optimism also came with Finance Ministry's Monthly Economic Review stating that strategic reforms and the rapid vaccination drive have placed the country on the path to swift recovery by enabling the economy to ‘navigate the ravaging waves’ of the COVID-19 pandemic. It also said sustained and robust growth in agriculture, a sharp rebound in manufacturing and industry, resumption of services activity, and buoyant revenues suggest that the economy is progressing well. Besides, the Finance Ministry has released Rs 9,871 crore of revenue deficit grant to 17 states. With the release of this installment, a total amount of Rs 69,097.00 crore has been released to eligible states as Post Devolution Revenue Deficit Grant (PDRD) in the current financial year.  Finally, the BSE Sensex rose 148.53 points or 0.25% to 60,284.31 and the CNX Nifty was up by 46.00 points or 0.26% to 17,991.95.

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