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Indian markets rose sharply on Wednesday after the Reserve Bank of India left its key interest rates unchanged. Today, domestic equities may continue their rally for a third straight session with positive start amid receding Omicron concerns and firm global cues. Sentiments will get a boost with Pradeep Multani, President of PHD Chamber of Commerce and Industry’s statement that the accommodative policy stance at this juncture would not only pave the way for a double digit GDP growth in the current year 2021-22, but will also help in creating a strong, sustainable and vibrant economy going forward. He also said that it is inspiring to note that the RBI has retained the projection for GDP growth at 9.5 per cent for 2021-22 despite the prevailing uncertainty caused by a new variant of Coronavirus. Traders will be taking encouragement as India's outbound goods shipments rose 44.24% year-on-year in the first week of December, led by a jump in exports of petroleum products, gems and jewellery and engineering goods. Merchandise exports were $8.5 billion during December 1-7. Traders may take note of report that Reserve Bank Governor Shaktikanta defended the central bank's more-than-anticipated dovish stance wherein the MPC unanimously voted to continue with an accommodative policy, saying ‘our overarching policy focus and priority now is supporting growth’ amid the threat of a third wave of COVID-19 and the legroom a cooling inflation print offers. Meanwhile, Telecom Minister Ashwini Vaishnaw sought suggestions from industry stakeholders to usher in more reforms in the sector and place Indian regulatory framework at par with the best in the world. There will be some buzz in the infra stocks as the Union Cabinet approved the continuation of Pradhan Mantri Awaas Yojana (Rural) for another three years to provide financial assistance for the construction of the remaining 155.75 lakh houses under the scheme. Power stocks will be in focus as Union power minister R K Singh approved 23 new inter-state transmission system projects worth Rs 15,893 crore. The new inter-state transmission system (ISTS) projects comprise 13 projects with an estimated cost of Rs 14,766 crore to be developed under Tariff Based Competitive Bidding (TBCB) and 10 projects with an estimated cost of Rs 1,127 crore to be developed under Regulated Tariff Mechanism (RTM). There will be some reaction in telecom stocks as minister of state for communications Devusinh Chauhan said India will have indigenously designed and developed 5G network by the third quarter of 2022. Insurance industry stocks will be in limelight as data from Irdai showed the gross direct premium written by non-life insurance companies rose by 5.5 per cent to Rs 15,743.22 crore in November. C. E. Info Systems (MapmyIndia) IPO will open for subscription today. The company aims to raise up to Rs 1,040 crore by way of complete Offer for Sale of equity shares in the price band of Rs 1,000 – Rs 1,033.

The US markets ended higher on Wednesday amid encouraging vaccine news flow. Asian markets are trading mostly in green on Thursday tracking overnight gains on Wall Street.

Back home, Indian equity benchmarks staged a strong up move for second straight session on Wednesday after the Reserve Bank of India (RBI), as widely expected, held interest rates steady at all-time low and maintained its accommodative stance for as long as necessary to support growth. The benchmark indices started firm, as traders took encouragement with global rating agency S&P’s statement that the impact of the new coronavirus variant on India's economic outlook would be contained. It expects India's economy to grow 9.5% in FY22 and 7.8% in FY23. Buying further crept in as Minister of State for Finance Bhagwat Karad said public sector banks (PSBs) recovered over Rs 4.18 lakh crore in the last three financial years from incidents pertaining to frauds and defaults. Also, the amount related to frauds of Rs 1 lakh and above has declined over the period. He added that the government has taken comprehensive steps to tackle defaults and to effect recovery from defaulters. Key indices extended gains to the day's high level in second half of the trading session, taking support from the Reserve Bank of India’s statement that retail inflation is likely to ease to around 5 per cent next fiscal on the back of government measures to ease supplies, reduction in fuel prices as well as prospects of good crops. For the current fiscal year to be ending on March 31, 2022, retail inflation is expected to be around 5.3 per cent. Traders overlooked Fitch Ratings’ report in which it has cut India's economic growth forecast to 8.4 per cent for the current fiscal year ending March 31, 2022, saying the rebound after the second wave of COVID infections has been subdued than expected. Fitch, which had previously forecast a GDP growth of 8.7 per cent in 2021-22 (April 2021 to March 2022), however, raised the economic growth projection for the next financial year (FY23) to 10.3 per cent from previously forecast 10 per cent. Finally, the BSE Sensex rose 1016.03 points or 1.76% to 58,649.68 and the CNX Nifty was up by 293.05 points or 1.71% to 17,469.75.

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