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Indian markets continued their strong bounce for a second straight day on Thursday, powered by buying across sectors led by financial, IT and oil & gas counters. Today, markets are likely to take a breather, after two days of back-to-back rallies, and make a negative start, tracking weakness across other Asian markets despite gains on Wall Street overnight. Uncertainty surrounding the Omicron variant is likely to be concern for market participants. India reported its first two cases of the Omicron coronavirus variant on Thursday but the government said it had no immediate plan to authorise booster vaccine shots despite demands from lawmakers. The union health ministry said two male patients with the new strain, aged 66 and 46 years, had shown mild symptoms in Karnataka. Also, continued foreign fund outflow likely to weight on market sentiments. Provisional data showed on the NSE that foreign portfolio investors (FPIs) remained net sellers for Rs 2765.84 crore in the Indian markets. However, some respite may come with the Centre for Monitoring Indian Economy’s statement that the index of consumer sentiment for rural India inched up marginally by 0.3% for the week ended November 28 while the index for consumer expectation went up by 1.3%, a much lower jump compared to weeks before the announcement of the repeal of farm laws. Some support may come as Reserve Bank of India data showed that reflecting the steady pace of banking business, the credit rose by 6.97 per cent in 12 months ended November 19, 2021. The outstanding credit of commercial banks stood at Rs 111.62 trillion, up from Rs 10.4.34 trillion a year ago. Aviation industry stocks will be in limelight as International Air Transport Association said the sudden emergence of Covid-19's Omicron variant may force countries to re-impose extensive travel restrictions. There will be some buzz in the telecom industry stocks with report that spectrum auctions for the 5G services are expected to be held early next year. Cement industry stocks will be in focus as rating agency Crisil said retail prices of cement is likely to rise again by another Rs 15-20 over the next few months and touch an all-time high of around Rs 400 per bag this fiscal, because of high prices of inputs such as coal and diesel. There will be some reaction in logistics industry stocks with a private report that the road logistics market in India is expected to grow at a compounded annual growth rate of 8 per cent in the next five years, to reach $330 billion by 2025. Meanwhile, Anand Rathi Wealth IPO was fully subscribed on day one of the initial share sale on Dalal Street. On the other hand, Tega Industries enters the final day of sale after having been subscribed 13.87 times.

The US markets ended higher on Thursday on hopes that Omicron may not severely impact economic recovery and continued dip in jobless claims. Asian markets are trading mostly in red on Friday as investors continue to monitor the situation surrounding the omicron Covid variant.

Back home, Key benchmark indices extended previous session’s rally to close at day's high and up over a percent on Thursday, backed by strong buying interest across sectors despite largely negative cues from global peers amid fears about the new Omicron variant. The broader markets also closed higher. After a flat start, key gauges picked up pace, as sentiments got a boost with data showing that India's merchandise exports in November rose by 26.49 per cent to $29.88 billion on account of healthy growth in sectors such as engineering, petroleum, chemicals and marine products. Sentiments remained up-beat with Union Minister for Electronics and Information Technology Ashwini Vaishnaw’s statement that the government is keen to make India a $250 billion electronic manufacturing hub in the next five years. He also expressed happiness over the electronics manufacturing industry assuring $300 billion revenue by 2025-26. Markets continued to trade with strength in second half of the session, as traders remain energized as the PHD Chamber of Commerce and Industry (PHDCCI) has suggested the rationalisation of direct and indirect tax rates, with an aim to boost consumption in the economy and enhance the tax base. PHDCCI President Pradeep Multani said refuelling of consumption demand should be the theme of the Budget to have a multiplier effect on production possibilities, private investments and employment creation in the country. Market participants overlooked the Reserve Bank of India (RBI) stating the combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022 which is worryingly higher than the target of 20 per cent to be achieved by 2022-23. Traders also took a note of Moody’s Investors Service’s statement that the economic impact of the Omicron variant of COVID-19 on emerging economies will depend on a mix of government restrictions, public comfort with social interactions, and capacity of governments and central banks to provide additional policy support to the private sector. Finally, the BSE Sensex rose 776.50 points or 1.35% to 58,461.29 and the CNX Nifty was up by 234.75 points or 1.37% to 17,401.65.

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