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Indian equity benchmarks ended lower on Wednesday as Fitch Ratings kept India’s sovereign rating unchanged at BBB- with a negative outlook. Today, markets are likely to make cautious start on the last day of the holiday-truncated trading week amid weak cues from global markets. However, some respite may come later in the day as Finance Minister Nirmala Sitharaman said there are clear signs of an uptick in the economy and the industry should now start taking risks and invest in capacity creation that will help cut reliance on imports. She also asked the industry to offer jobs to reduce income disparity and cut down on importing finished goods reduce and instead ramp up investment in manufacturing. Traders may take note of DEA Secretary Ajay Seth’s statement India needs to double the capital expenditure in the medium term from about 5-6 per cent of the Gross Domestic Product (GDP) currently to fund infrastructure. He added efforts have to be made to channelise all avenues of savings for garnering resources for stepping up investment in the infrastructure sector. Meanwhile, department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the government will invite financial bids for privatisation of five to six public sector undertakings (PSUs) in December-January, and close these transactions in the current financial year. There may be some action in leather industry stocks as Union Minister of Commerce and Industry, Piyush Goyal, said India should aim to achieve more than $10 billion worth of leather exports by 2025. There will be some buzz in steel sector’s stocks as the PHD Chamber of Commerce and Industry (PHDCCI) requested the government to have a regulator to check rising steel prices. There may be some action in coal related stocks on report that India’s coal consumption is expected to grow in absolute terms in the coming few years and phasing out the fuel could have severe repercussions on the livelihoods of many Indians. There may be some buzz in sugar stocks as industry body ISMA said India’s sugar production rose 24 per cent to 20.9 lakh tonnes during October 1-November 15 on higher output in Maharashtra and Karnataka, while mills have entered into contracts to export 25 lakh tonnes of sweetener so far. Meanwhile, Indian digital payments company Paytm is set to make its stock market debut today, after its $2.5 billion initial public offering (IPO), India’s largest, was oversubscribed last week. Paytm, which counts China’s Ant Group and SoftBank among its backers, raised $1.1 billion from institutional investors and last week received $2.64 billion worth of bids for the remaining shares on offer, or 1.89 times.

The US markets ended lower on Wednesday on inflation fears and supply chain concerns stemming from retailers' earnings, with investors betting the Federal Reserve will raise interest rates sooner than expected to tame rising prices. Asian markets are trading mostly lower in early deals on Thursday following weak cues from the US markets. 

Bank home, Indian equity benchmarks ended lower for the second straight day in choppy trade on Wednesday, amid selling in frontline bluechip counters. Initially, benchmarks traded in a narrow band with a negative bias, as traders got anxious as Fitch Ratings has kept India’s sovereign rating unchanged at BBB- with a negative outlook. It stated that the rating balances a still-strong medium-term growth outlook and external resilience from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural issues. Further, weakness also prevailed in the markets as foreign portfolio investors (FPIs) sold shares worth Rs 560.67 crore, in the Indian equity market on 16 November, provisional data showed. However, key gauges recouped initial losses to trade marginally in green in afternoon deals, as traders took some support with Commerce and Industry Minister Piyush Goyal’s statement that India attracted record foreign direct investments (FDI) in the last seven years and this trend is expected to continue in the coming years as well on account of major structural reforms being undertaken by the government. He also said that India is focusing on integrating its quality standards with the world and the country needs to let go of the mindset of a particular product being for the domestic market and others for the export market. Though, markets failed to hold recovery and extended losses in late afternoon trading tracking weakness across other Asian markets. Sentiments remain dampened even as a private report stated that private equity (PE) and venture capital (VC) investments touched an all-time high of $12.9 billion in October, on the back of high-value deals. The investments were 71 per cent higher as compared with October 2020’s $7.5 billion and 2.5 times the $5.2 billion value recorded in September this year. Traders also took a note of the Reserve Bank Governor Shaktikanta Das’ statement that numerous macro indicators suggest that the economic recovery is now taking hold after the beating it has taken during the pandemic, but for growth to be sustainable and reach its potential, private capital investment has to resume. He said the economy has the potential to grow at a reasonably high pace in the post-pandemic scenario, provided private capital investment resumes. Finally, the BSE Sensex fell 314.04 points or 0.52% to 60,008.33 and the CNX Nifty was down by 100.55 points or 0.56% to 17,898.65.

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