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Indian markets made a comeback on Tuesday to close 1.6 percent higher each following two days of steep losses. Today, the markets are likely to continue their gaining momentum with positive start following rally in global markets and ahead of RBI policy outcome. Investors will be looking ahead to the Reserve Bank of India’s (RBI’s) MPC’s decision later in the day following a three-day policy meeting. The RBI's six-member monetary policy committee (MPC), headed by Governor Shaktikanta Das, is likely to maintain key interest rates for a ninth straight meeting, retaining an accommodative stance amid the threat surrounding Omicron coronavirus variant. Traders may take note of 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. Andrew Wood, director, sovereign ratings, S&P said ‘we are seeing a healthy recovery’. However, there may be some cautiousness with a private report that after falling marginally for two weeks, the cost of debt-funds for the states jumped again as the weighted average cost of borrowings rose by 37 bps to a one-month high of 6.80 per cent in the auction on December 07 compared to the last week. There will be some buzz in the sugar industry stocks as trade body AISTA said sugar mills have exported 9.39 lakh tonnes of the sweetener till the first week of December during the ongoing 2021-22 marketing year that started from October 1, and are not in hurry to sell further stock in view of sluggish global price trend. Aviation stocks will be in focus as rating agency ICRA said continuing on the recovery path, domestic air passenger traffic crossed the 10-million mark in November for the first time since the pandemic hit the aviation industry in March last year but the coronavirus' new variant Omicron has the potential to spoil the party. There will be some reaction in infrastructure industry stocks as Crisil Ratings said strong order execution will swell the revenue of road engineering, procurement and construction (EPC) companies by 15 per cent this fiscal, compared to 5 per cent in the pandemic-marred last fiscal. Insurance industry stocks will be in limelight with a private report that Life insurers’ new business premium (NBP) reported stellar performance in November after a poor showing in October, on the back of strong growth in group single premiums for both private insurers and Life Insurance Corporation (LIC) of India. Shriram Properties' IPO will open for subscription today. The company plans to raise up to Rs 600 crore by way of public issue of equity shares in the price band of Rs 113 to Rs 118.

The US markets ended higher on Tuesday as fears of Omicron continued to recede and investors bet on a Santa (December end) rally. Asian markets are trading mostly in green on Wednesday amid a global relief rally amid positive news in early reports about the potential impact of the Omicron variant of COVID-19.

Back home, Indian equity benchmarks bounced back strongly after two sessions of sharp losses amid positive global cues as concerns about the Omicron coronavirus variant eased. Markets opened a day with good gap and managed to hold its bullish stream throughout day, as traders took encouragement with a private report that Indian economy is showing strong signs of recovery from the devastation caused by the pandemic, with an upswing being reported in 19 out of the 22 economic indicators as compared to the pre-Covid levels. Some optimism also came in as new research from the US India Strategic Partnership Forum (USISPF) and digital currency exchange CrossTower has said web 3.0, the idea that the next iteration of the Internet which will be built on concepts of decentralization, openness, and greater user utility, can help India contribute an additional $1.1 trillion of economic growth to its GDP over the next 11 years. Benchmarks extended gains in late afternoon session, taking support from Minister of State for Finance Pankaj Chaudhary’s statement that India currently has the fourth largest foreign exchange reserves in the world. Some solace also came as the government said it is taking all steps to strengthen the National Company Law Tribunal (NCLT) to reduce delays in disposal of cases under the insolvency law. Adding to the optimism, Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the strong initial public offering (IPO) issuances in FY22 in the Indian buoyant stock market bode well with the country’s economic recovery. Market participants overlooked domestic credit rating agency ICRA’s report stated that the looming threat of the newly discovered Omicron variant of Covid-19 can severely affect loan securitisation volumes in the country as concerns over retail asset quality reemerge. Finally, the BSE Sensex rose 886.51 points or 1.56% to 57,633.65 and the CNX Nifty was up by 264.45 points or 1.56% to 17,176.70.

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