IGI Logo

Indian markets ended a choppy session mildly lower on Wednesday, as gains in pharma and auto stocks were offset by financial and IT counters. Today, the start of the F&O series expiry session is likely to be flat-to-positive tracking gains in global markets. Sentiments will get a boost as the Federation of Indian Export Organisations (FIEO) said the country's exports are expected to register healthy growth rate in the financial year 2022-23 and might touch $530 billion as exporters are flushed with orders. It added that additional exports will come from some of the PLI (production-linked incentive) sectors in the next fiscal. Traders may take note of the I-T department’s statement that over 5 crore income tax returns (ITR) for the financial year ended March 2021 have been filed so far. However, the expiry day is very much likely to bring in volatility later in the day. Rising corona cases are likely to dampen sentiments in the markets. India recorded a dramatic surge in its Omicron tally by logging more than 200 cases. Traders may concerned as the Reserve Bank in its second financial stability report stated that though the economy has steadily gained momentum and remained resilient since the second quarter of the current fiscal, the Omicron variant of coronavirus remains the major challenge along with rising inflation pressures. There may some cautiousness as the Reserve Bank expressed doubts about the government’s ability to contain fiscal deficit at the budgeted 6.8 per cent this fiscal year after it moved the second supplementary demand of grants worth Rs 3.73 lakh crore which came in spite of a massive 83 per cent jump in net tax revenue so far this year to Rs 10.53 lakh crore. Investors will be looking ahead to the GST Council, chaired by Finance Minister Nirmala Sitharaman, meeting to be held on December 31 to discuss report of the panel of state ministers on rate rationalisation. This will be a physical meeting, which will also discuss correction in duty inversion in certain goods. Meanwhile, the government has extended till February 28 the deadline for businesses to file GST annual returns for 2020-21 fiscal ended March 2021. There will be some buzz in the telecom services sector stocks as ICRA revised outlook on telecom services sector to stable from negative and said the telecom tariff hike along with the recent relief package offers sufficient headroom for the industry to undertake deleveraging as well as fund capex for 5G tech upgrade. Banking stocks will be in focus as RBI report showed that bad loans of commercial banks in India may rise to between 8.1 and 9.5 per cent under varied degrees of stress by September 2022 from 6.9 per cent in September 2021.

The US markets ended mostly higher on Wednesday on a boost from retailers including Walgreens and Nike, as investors shrugged off concerns on the spreading Omicron variant. Asian markets are trading mostly in green on Thursday following the overnight gains on Wall Street.

Back home, Indian equity benchmarks snapped their two-day gaining streak and settled marginally lower on Wednesday, amid volatile trading ahead of the expiration of monthly derivatives. After making cautious start, the benchmark indices swung between gains and losses for whole day, in tandem with weak global market cues. Caution prevailed among investors with the finance ministry’s report stated that the government's total liabilities (including liabilities under the 'Public Account') stood at Rs 125.71 lakh crore in the September quarter (Q2FY22), up 3.97 per cent from the previous quarter. The total liabilities of the government were Rs 120.91 lakh crore in the three months ended June (Q1FY22). Traders remain worried as India reported 6,358 new coronavirus cases on Tuesday, according to the health ministry. The active caseload of the country now stands at 75,456. Omicron cases have risen to 653. However, losses remain capped as some optimism remained among traders with rating agency ICRA in its latest report stated that India’s real gross domestic product (GDP) is likely to maintain a 9% growth rate in fiscal 2022 and 2023. The Indian economy grew at 8.4% in the second quarter of the current fiscal, as against a growth of 20.1% in the April-June quarter. Some support also came with the Reserve Bank of India’s (RBI) report said that non-banking financial companies (NBFCs) are expected to remain buoyant going ahead, with the increased pace of vaccinations and the broadening revival of the economy. It said the COVID-19 pandemic has tested the resilience of NBFCs, but so far, the sector has emerged stronger with reasonable balance sheet growth, increased credit intermediation, higher capital, lower delinquency ratio and enlarged liquidity cushions. Traders also took note of report that Finance Minister Nirmala Sitharaman will hold a meeting with finance ministers of states on Thursday as part of customary pre-Budget consultations with various stakeholders. Finally, the BSE Sensex fell 90.99 points or 0.16% to 57,806.49 and the CNX Nifty was down by 19.65 points or 0.11% to 17,213.60.

Above views are of the author and not of the website kindly read disclaimer