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Indian equity markets settled at fresh closing highs on Thursday. Today, the start is likely to remain jubilant and the markets will extend their gains encouraged by Union Finance Minister Nirmala Sitharaman’s statement that the National Asset Reconstruction Company (NARCL) would be operational soon, and it had to ensure resolving bad loans within five years, beyond which the guarantee to be issued by the government would expire. The Cabinet approved a government guarantee of Rs 30,600 crore to be provided for the security receipts issued by the NARCL to buy bad loans of lenders. There will be some support as the Reserve Bank of India (RBI) said the inflation trajectory is coming down faster than anticipated and the inflation print of 5.3 per cent in August has proven the monetary policy committee’s (MPC) move to look through May’s price shock as the right call. Meanwhile, RBI in its latest article has said that the uptick in the credit growth in the recent months notwithstanding the second COVID-19 wave augurs well for the economy. Bank credit growth has witnessed significant fluctuations in the past one and a half decades. It said the period between 2007-08 and 2013-14 could be characterised as a bank credit boom period in the Indian economy, as non-food credit registered double-digit growth, primarily driven by robust credit growth to the industrial sector. Traders may take note of report that European Commission and the High Representative adopted a Joint Communication on the EU Strategy for cooperation in the Indo-Pacific. This is seen as a major development for the region ahead of the first in-person Quad meeting in Washington next week, in which key players of the Indo-Pacific i.e. India, Japan, Australia and the US are taking part. There will be some buzz in aviation stocks on report that the Directorate General of Civil Aviation (DGCA) said around 6.7 million domestic passengers travelled by air in August, 33.83 per cent higher than 5 million who travelled in July. The cap on capacity was increased to 72.5 per cent from August 12. Earlier airlines could only operate up to 65 per cent of their capacity. All airlines have reported an increase in load factors.

The US markets ended mostly lower on Thursday as investors weighed mixed signals in the latest US economic data. Asian markets are trading mostly lower in early deals on Friday following mixed cues from US markets. 

Back home, Indian equity benchmarks closed at record closing highs for the third consecutive session on Thursday aided by gains in banking, energy and PSU stocks. Besides, a firm global market mood and recently introduced reforms for the telecom and auto sector pushed the indices to fresh peaks. Markets made positive opening, as sentiments got boost with report that the United Nations Conference on Trade and Development (UNCTAD) has pegged India's economic growth rate to hit a four-year high of 7.2 per cent for 2021 against a contraction of 7 per cent in 2020. At this rate, India would be the fastest growing economy after China, which is projected to grow by 8.3 per cent. Calculations are based on GDP at constant dollars in 2015. Further, some support came in as defence Minister Rajnath Singh said the trust between the government and the industry has gone up following the scrapping of the retrospective taxation regime and the Centre is open to new ideas to further boost the country’s economic growth. Key indices extended gains in afternoon session, as traders remained positive with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the global economic recovery is strengthening and this is the opportune moment for a change in the world order. He emphasised that a new world order will usher in if the global economy remains open. Additional support came with private report stating that investments by private equity and venture capital funds surged to $10.7 billion in August from $2.2 billion in the same month last year, and $9.7 billion in July this year. Adding to the optimism, Retailers Association of India (RAI) in its latest survey has said that retail sales improved in August and reached 88 percent of the pre-pandemic levels. In July, retail sales stood at 72 per cent of the pre-pandemic levels of July 2019. Finally, the BSE Sensex rose 417.96 points or 0.71% to 59,141.16 and the CNX Nifty was up by 110.05 points or 0.63% to 17,629.50.    

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