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Indian markets ended higher for the second session on Tuesday boosted by auto stocks and financials, as the daily rise in domestic COVID cases stayed below the 300,000-mark for a second straight day. Today, the markets are likely to halt the rally and may start the session in red amid weakness in the global markets. Traders will be concerned as India reported 267,174 fresh Covid-19 cases to take total infections past 26.7 million, according to Worldometer. The country also logged a record 4,525 deaths in the last 24 hours. There will be some cautiousness with a private report that India’s second wave of virus cases will hit the economy by prompting consumers to save rather than spend, unlike last year’s contraction that was driven mainly by supply disruptions. Though, some support may come later in the day as RBI’s Monetary Policy Committee (MPC) member Ashima Goyal said India’s economy will do well once vaccination reaches a critical mass as pent-up demand, global recovery and easy financial conditions will boost activities. Besides, the Union Finance Ministry, on the recommendation of the Panchayati Raj Ministry, released Rs 8,923.8 crore to 25 states for providing grant to rural local bodies. The spread of COVID-19 pandemic in different parts of the country has recently assumed serious proportions. The vulnerabilities of the rural communities need to be especially addressed. There will be some buzz in tractor industry stocks as rating agency Crisil said growth in the domestic tractor sales volume is likely to be at 3-5 per cent this fiscal, given the strong second wave of COVID-19 and rising cases in the hinterland. IT & Business Services industry stocks will be in focus as research firm IDC said the IT and Business Services market in the country recorded a lower year-on-year growth of 5.41 per cent to $13.41 billion in 2020 due to the impact of the COVID-19 pandemic on organisations. There will be some reaction in glass industry stocks as ratings agency Crisil said sharp increase in Covid-19 vaccination led pharma demand as well as an expected healthy growth in end-user sectors like automobiles and construction is expected to drive revenue growth of glass makers. Aviation stocks will be in limelight reacting to the Indian aviation regulator DGCA’s data showing that around 57.25 lakh domestic passengers travelled by air in April, which is 26.8 per cent lower than 78.22 lakh who travelled in March.

The US markets ended in red on Tuesday slumping on a sharp decline in telecom stocks and weak housing starts data that overshadowed better-than-expected earnings from Walmart and Home Depot. Asian markets are trading lower on Wednesday with some markets in the region closed for holidays. Markets in Hong Kong and South Korea are closed on Wednesday for holidays.

Back home, Indian equity benchmarks surged for the second straight session and ended with gains of over one and half percent on Tuesday driven by gains in index-heavyweights Mahindra & Mahindra, Bajaj Auto and Titan Company amid positive global cues. Key indices made a gap-up opening, as India recorded daily cases below 3 lakh for the second straight day. The fresh case count in the last 24 hours stood at 2.63 lakh versus 2.81 lakh. Besides, the Union health ministry said that more than two crore covid-19 vaccine doses are still available with the states and Union territories, while nearly three lakh doses are in the pipeline and will be received by them within the next three days. Investors sentiment remained upbeat with the RBI data showing that India Inc's foreign investment in the first month of this current fiscal jumped by more than two-times year-on-year to $2.51 billion. Markets maintained their upward momentum in the late afternoon session, taking support from RBI’s Monetary Policy Committee (MPC) member Ashima Goyal’s statement that India has the potential to be a centre of vaccine production and will be able to ramp it up soon. Once vaccination reaches a critical mass, the economy will do well with pent up demand, global recovery and easy financial conditions. Traders also took a note of an RBI article stating that the double-digit growth registered by non-banking financial companies (NBFCs) during the second and third quarters of 2020-21 amid the disruptions caused by the COVID-19 pandemic reflects the 'resilience' of these entities. Though, there was some cautiousness too with Moody's Investors Service stating that if the second wave of the pandemic does not decline to more manageable levels and results in a prolonged and wider lockdown, it will have a more severe effect on companies' earnings recovery. Finally, the BSE Sensex gained 612.60 points or 1.24% to 50,193.33, while the CNX Nifty was up by 184.95 points or 1.24% to 15,108.10. 

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