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Indian markets extended gains to a second straight day on Monday to close at their strongest levels recorded since November 15 amid broad-based gains. Today, the markets are likely to start session in negative note amid weak global cues. Traders will be concerned with a private report stating that sluggish growth momentum in the December quarter and emerging risk from the third Covid-19 wave may shave 80 basis points (bps) off India’s real gross domestic product (GDP) growth to 9 per cent for FY22. Also, the Indian Banks’ Association (IBA) said the resurgence in the Covid cases caused by the Omicron variant may create some disruptions to the growth momentum. There will be some cautiousness as data from the Reserve Bank of India (RBI) showed outward foreign direct investment by Indian companies fell by over 8 per cent to $2.05 billion in December 2021 in the current fiscal. Rising coronavirus cases may impact the markets. the Union Health Ministry data showed that India saw a single-day rise of 1,79,723 coronavirus infections taking the total tally to 3,57,07,727, including 4,033 cases of the Omicron variant reported across 27 states and union territories so far. However, some support may come later in the day as a quarterly employment survey released by the Union labour ministry showed that total employment in nine sectors rose to 3.10 crore during the July-September period of 2021, an increase of 2 lakh compared to June quarter last year. Meanwhile, the Centre has procured 532.86 lakh tonnes of paddy so far in the ongoing 2021-22 marketing year season, with maximum quantities being purchased from Punjab. There will be some buzz in the energy stocks with ICRA’s report that the country's renewable energy capacity addition is estimated to touch 16 GW in the next financial year in view of the strong pipeline of 55 GW clean energy projects. Telecom stocks will be in focus as a Trai report released showed that telecom service providers' gross revenue declined by 1.36 per cent on a year-on-year basis to Rs 67,300 crore in the July-September 2021 quarter. There will be some reaction in insurance industry stocks as data from Irdai showed the gross direct premium underwritten by non-life insurance companies grew by 7.3 per cent to Rs 18,953.09 crore in December 2021. The non-life insurance companies had underwritten gross premium valuing at Rs 17,662.32 crore in December 2020.

The US markets ended mostly lower on Monday as traders are awaiting the testimony of Jerome Powell for tapering cues to curb inflation. Asian markets are trading mixed on Tuesday amid concerns about a tightening US monetary policy to address accelerating inflation.

Back home, Extending gains to a second straight session, Indian equity benchmarks closed at a near two-month high on Monday, amid across-the-board buying, with Capital Goods and Realty stocks in high demand. The markets started off the week on a strong note, as traders took encouragement with the National Statistical Office (NSO) in its first advance estimate indicated that the Indian economy remains on track to regain its position as the world's fastest-growing major economy and put the GDP expansion at a tempered 9.2 per cent this fiscal. Traders also remain energized with SBI Ecowrap report stating that India's real GDP is expected to grow at around 9.5 per cent in 2021-22 on a year-on-year (YoY). As per the report, going forward, even if the rising Covid infections could impact mobility, yet economic activity is not expected to get affected much. Adding more optimism, foreign investors have turned net buyers in the first week of January by infusing Rs 3,202 crore in Indian equities, as correction in markets provided them good buying opportunity. Benchmarks extended gains and were trading near the day's high in late afternoon deals, as sentiments’ were upbeat after a quarterly employment survey by the labour ministry released that total employment generated by nine select sectors stood at 3.10 crore in the July-September 2021 quarter, which is 2 lakh more than that of the April-June period. Traders also took solace with private report stated that the month of December 2021 witnessed signs of revival in hiring activity in multiple sectors beyond IT, such as retail, hospitality and education. Additional support came as the country began administering the precautionary dose or the booster shot of coronavirus vaccine to health and frontline workers and immuno-compromised senior citizens. Finally, the BSE Sensex rose 650.98 points or 1.09% to 60,395.63 and the CNX Nifty was up by 190.60 points or 1.07% to 18,003.30

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