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Indian markets ended higher with Nifty at record closing high boosted by banks and IT stocks, as rise in Asian peers. Today, the markets are likely to get positive start tracking global peers coupled with decline in covid cases in the country. India recorded 179,770 fresh Covid-19 cases in the last 24 hours, the lowest daily count in 44 days, as infections continued to decrease in the country. Investors will be eyeing the goods and services tax (GST) Council meet today after a span of seven months. There are reports that some opposition ruled states could pitch for an extension of the GST compensation regime for five more years beyond 2022. Sources say that the Council is expected to discuss the compensation shortfall, which is estimated at Rs 1.6 lakh crore for the current fiscal, and is likely to be funded by borrowings this year as well. Some support will come with a private report that the government is hopeful of a speedy launch of single-dose COVID-19 vaccine Sputnik Light in India and all stakeholders, including the Russian manufacturer and its Indian partners, have been directed to fast-track the application and regulatory approval procedures for the jab to boost the country's vaccination drive. Besides, the government said India is witnessing a downswing in the second wave of COVID-19 and hopefully it will be sustained even when restrictions are gently, systematically and cautiously relaxed. Though, there may be some cautiousness as the central bank, in its annual report, issued caution over the meteoric rise in stock prices at a time when the country’s gross domestic product (GDP) has contracted. Meanwhile, Foreign Institutional Investors (FII) turned net sellers on Thursday, pulling out Rs 660 crore from domestic markets. Domestic Institutional Investors (DII) were net buyers, pumping in Rs 112 crore into domestic equities. Banking stocks will be in focus as Reserve Bank of India (RBI) asked banks to closely monitor their bad loans and prepare themselves for higher provisioning in the wake of second COVID wave and the Supreme Court order lifting the ban on classification of non-performing assets. Also, RBI data showed financial frauds reported by banks decreased by 15 percent in numbers and by 25 percent in total value terms compared to the previous financial year. There will be some reaction in realty sector stocks as ratings agency Crisil said although the market is growing in 2021-22, a full recovery in the residential realty sector is expected only in 2024. According to it, the country’s housing market is expected to grow by 5-10 per cent in the current fiscal year.

The US markets ended mostly higher on Thursday as data showing improvement in the labor market helped bolster expectations in the economic recovery and spurred a minor rotation towards stocks seen as more likely to benefit from the rebound. Asian markets are trading mostly in green on Friday as investors bet the US will lead the world out of the COVID-19 pandemic, with the focus turning to a multi-trillion dollar spending boost by the Biden administration.

Back home, Indian equity benchmarks traded volatile and settled marginally in the green on the day of monthly expiry of May month contracts. Markets made a cautious start, as rating agency Crisil in its research report said higher input prices and disruptions to the rural economy have resulted in price pressures and inflation is back to haunt us. The report by Crisil said it sees upside risks to its 5 per cent estimate on consumer price inflation in FY21 because of this. Besides, India recorded over 211,000 new Covid infections, while deaths from the disease rose by 3,842. The country's total cases now stand at 27.36 million. However, benchmarks moved higher in noon deal as traders took some support with private report that the government may at the beginning of the unlock phase announce another stimulus package for the most hit sectors such as small business and self-employed, with the world's worst pandemic outbreak scarring nascent economic recovery. However, key indices erased all the gains to turn negative in late afternoon session, as traders got anxious with Reserve Bank of India’s statement that the second wave of COVID-19 pandemic has triggered revision of growth projections for the current financial year with consensus gravitating towards its earlier forecast of 10.5 per cent. Reserve Bank’s projection 10.5 per cent for the year 2021-22 -- 26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4. But, markets managed to end session in green terrain, taking support from report that amid the second wave of COVID-19 pandemic, CII President Uday Kotak has ‘strongly’ recommended the government to consider another fiscal package to support the lower end of the society as well as small and medium businesses. Traders took a note of report that the shortfall in GST compensation payable to states in the current fiscal is estimated at Rs 2.69 lakh crore, of which Rs 1.58 lakh crore would have to be borrowed this year. The Centre expects to collect over Rs 1.11 lakh crore through cess on luxury, demerit and sin goods which will be given to the states to compensate them for the shortfall in revenue arising out of GST implementation. Finally, the BSE Sensex rose 97.70 points or 0.19% to 51,115.22, while the CNX Nifty was up by 36.40 points or 0.24% to 15,337.85.

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