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Indian markets continued to rise for a third straight session on Thursday as investors cheered a dovish RBI policy. Today, the markets are likely to make gap-down opening amid weakness across global markets. There will be some cautiousness as Former Reserve Bank of India Governor D Subbarao said the concern today was that the low interest rates and the enormous liquidity available in the system could potentially disrupt financial stability. He added that the challenge for central banks and for the Reserve Bank of India was to juggle between maintain price stability, supporting growth and employment, preserving financial stability and all this in a globalised world. However, some respite may come later in the day as Finance minister Nirmala Sitharaman said that India is the fastest growing economy despite the pandemic and asserted that the government managed the economy well. Some support may come with RBI report that the consumer confidence has shown gradual improvement for the third successive round of the survey. The Reserve Bank of India (RBI) said the current situation index (CSI) increased marginally on the back of better sentiments on general economic situation, household income and spending. Meanwhile, Commerce and Industry Minister Piyush Goyal said India and Australia are looking to finalise an early harvest agreement in the next 30 days and this pact is likely to cover most areas of interest that both the countries have. There will be some buzz in the banking stocks as RBI data showed that bank credit grew by 8.21 per cent to Rs 115.82 lakh crore and deposits by 8.31 per cent to Rs 160.33 lakh crore in the fortnight ended January 28. Textile industry stocks will be in focus as India Ratings and Research (Ind-Ra) said reduction in impact of Covid-19's third wave, as well as accelerated re-opening activities, will boost textile demand in FY23. There will be some reaction in healthcare industry stocks as the Reserve Bank of India (RBI) proposed to extend the term-liquidity facility of Rs 50,000 crore offered to emergency health services by three months till June 30, 2022. Investors awaited the last leg of corporate earnings for cues.

The US markets ended lower on Thursday after worse-than-expected US inflation data stokes fears of aggressive rate hikes by the Fed. Asian markets are trading mostly in red on Friday tracking overnight losses on Wall Street.

Back home, Indian equity benchmarks extended gains to a third straight day on Thursday, led by strong performance in Power, Metal and Banking stocks.  After making cautious start, benchmark indices rebounded sharply post RBI’s announcements. Reserve Bank of India (RBI) kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. Besides, RBI retained its growth projection at 9.2 per cent and inflation at 5.3 per cent for the current financial year. Traders also found some solace with Union Minister of State for Commerce and Industry Som Parkash stating that India has received Foreign Direct Investment (FDI) inflows worth $339.55 billion in the last five financial years. There has been a continuous increase in the inflow of FDI in recent years. It increased from $45.15 billion in 2014-15 to $81.97 billion in 2020-21. Markets maintained their upward momentum in the late afternoon session, taking support from Minister of State for Commerce and Industry Anupriya Patel’s statement that India is in discussion with the 10-nation bloc ASEAN for initiating the review of the free-trade agreement in goods between the two regions to seek more market access for domestic products. Some optimism also came with Finance Minister Nirmala Sitharaman’s statement that the projected fiscal deficit of 6.9 per cent for the current financial year is a ‘responsible’ target as the government has tried to ensure a balance between keeping up expenditure and being fiscally prudent. The minister also said the Rs 1 lakh crore loan for states will help in speeding up infrastructure development and capital expenditure. Meanwhile, Revenue Secretary Tarun Bajaj said the government is open to some tinkering in the varied rates and holding period for computation of capital gains tax on shares, debt and immovable property, in a bid to make it simple. Finally, the BSE Sensex rose 460.06 points or 0.79% to 58,926.03 and the CNX Nifty was up by 142.05 points or 0.81% to 17,605.85.