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Indian markets bounced back on Wednesday after a two-day decline, with the Sensex and Nifty climbing nearly 1 percent each, tracking heavy buying in IT and banking stocks. Today, markets likely to start session on optimistic note mirroring positive cues from global markets. There will be some volatility ahead of the expiry of monthly derivative (futures and options) contracts due by the end of the session. However, some cautiousness may come as Moody’s Analytics, the research arm of the rating agency Moody’s Investor Services, warned that the decade-long dream run of low inflation for emerging economies in Asia is about to end and there will be consequences. Traders may take note of a private report that the Reserve Bank of India’s rate-setting panel will go for a 0.35 per cent hike in the key repo rate at its meeting next week. Meanwhile, capital markets regulator Sebi has come out with new guidelines on settlement of running accounts of clients' funds lying with stock brokers, to be applicable from October 1. Under the guidelines, the settlement of the running account of funds of the client will be done by the trading member after considering the End of the day (EOD) obligation of funds as on the date of settlement across all the exchanges on the first Friday of the quarter for all the clients. Also, Sebi has extended the deadline by three months to November 1, for commencing the validation of all KYC records by KYC Registration Agencies (KRAs). Telecom industry stocks will be in action as India's first 5G auction received bids worth Rs 1.49 trillion on day two, as aggressive bidding across bands by players like Reliance Jio and Bharti Airtel pushed the sale over to the third day. There will be some reaction in gold related stocks as the World Gold Council said a sharp fall in purchases by investors pulled global gold demand down 8% in the second quarter compared to the same period in 2021. IT industry stocks will be in limelight with a private report that after a big jump in the margins and profits in the quarters immediately after the break-out of the Covid-19 pandemic in March 2020, the export-driven IT services companies are now facing their biggest earnings challenge in more than a decade. Investors will be eyeing a slew of companies to report their June quarter results (Q1FY23) later in the day.

The US markets ended higher on Wednesday after Fed announced another 75 basis point interest rate, as widely expected, and Powell hinted at a slowdown in the pace of rate hikes at future meetings. Asian markets are trading mostly in green on Thursday following the broadly positive cues from Wall Street overnight.

Back home, Indian equity benchmarks bounced back on Wednesday after a two-day decline and ended with gains of around a percent, led by strong buying support in healthcare, Capital Goods and IT stocks. Benchmarks made cautious start, as the International Monetary Fund (IMF) in its World Economic Outlook update July 2022 has cut India's growth rate by 0.8 percentage point to 7.4 per cent for fiscal year 2022, reflecting ‘mainly less favourable external conditions and more rapid policy tightening’. In April, the IMF had projected a ‘fairly robust’ growth of 8.2 per cent for India in 2022. Some concern also came amid a private report stating that the global economy is in the grips of a serious slowdown, with some key economies at high risk of recession and only sparse meaningful cooling in inflation over the next year. However, key gauges erased initial losses to enter in green terrain in morning deals, as traders found some solace with Minister of State for Finance Bhagwad Karad stated that the amount involved in fraud cases reported by public sector banks (PSBs) has come down to Rs 3,204 crore in the last fiscal from Rs 28,884 crore in 2017-18. Sentiments remained up-beat as ECGC has introduced a new scheme to provide enhanced export credit risk insurance cover to the extent of 90% to support small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).  The scheme is expected to benefit a number of small-scale exporters availing of export credit with banks which hold the ECGC WT-ECIB covers. Finally, the BSE Sensex rose 547.83 points or 0.99% to 55,816.32 and the CNX Nifty was up by 157.95 points or 0.96% to 16,641.80.

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