IGI Logo

Indian markets extended gains to a fifth straight session on Thursday, though gains in oil & gas and metal shares were offset by losses in financial and consumer stocks. Today, markets are likely to start session on a weak note following lackluster trade in global markets. Investors will be eyeing on the Wholesale Price Index (WPI) data to be out later in the day for further cues. There will be some cautiousness with United Nations’ report that India is forecast to grow at 6.5 per cent in fiscal year 2022, a decline from the 8.4 per cent GDP estimate in previous financial year, and while the country's economic recovery is on a solid path amid rapid vaccination progress, coal shortages and high oil prices could put the brakes on economic activity in the near term. Traders may take note of report that the FSDC sub-committee headed by Reserve Bank Governor Shaktikanta Das has reviewed the economic situation in the backdrop of the COVID-19 pandemic and resolved to keep a close watch on the unfolding developments with a view to ensure financial stability. Meanwhile, Niti Aayog Vice-Chairman Rajiv Kumar said the country needs much more ‘equitable’ growth as inequality could lead to tensions in society. NBFCs and housing finance companies stocks will be in focus with the central bank’s statement that eight Non-Banking Financial Companies (NBFCs) and one housing finance company have surrendered their certificates of registration to RBI. There will be some reaction in aviation industry stocks as ratings agency Crisil said the ongoing third pandemic wave led by Omicron could pose fresh turbulence for air traffic, pushing its full recovery into fiscal 2024. The agency had earlier expected the full recovery to happen in fiscal 2023. Auto component industry stocks will be in limelight as rating agency Icra revised downwards the revenue growth forecast for the auto components industry in the current fiscal to 15-17 per cent, citing the impact of the Omicron wave, delayed recovery in semiconductors shortage and muted two-wheelers demand.

The US markets ended lower on Thursday as investors took profits, particularly in technology stocks after a three-day rally, while multiple Federal Reserve officials were out talking about inflation and interest rate hikes. Asian markets are trading mostly in red on Friday tracking major losses on Wall Street overnight.

Back home, Indian benchmark indices ended a choppy session higher, managing to take their winning streak to a fifth straight day on Thursday, led by gains in Metal, Capital Goods and Power stocks. After making cautious start, markets gained some traction, as traders got some support with the World Bank’s statement that Narendra Modi government’s Production-Linked Incentive (PLI) Scheme will likely help India’s economy grow at 8.7% in the next financial year 2022-23, beating emerging market peers including China. Some support also came with Commerce and Industry Minister Piyush Goyal’s statement that startups of the country will help India transition from an assembly economy, particularly in the digital world, to a knowledge-based economy. In this digital age, technology has removed boundaries and barriers. However, key indices erased initial gains amid volatility due to subdued macro-economic data. India’s industrial production growth remained subdued for the third straight month and expanded by 1.4 per cent in November, mainly due to the waning low base effect. Also, rising prices of essential kitchen items pushed the retail inflation to a six-month high of 5.59 per cent in December, close to the Reserve Bank’s upper tolerance limit of 6 per cent. Traders also remain concerned as a private report revised downwards its India's growth forecast for the current financial year to 9.1 per cent from 9.5 per cent earlier, citing the massive surge in Omicron infections and the resultant impact on overall economic activities in the March quarter. But, markets managed to end in green, taking support from India's Bharat Biotech statement that the booster shot of its Covaxin COVID-19 vaccine administered six months after the last of two doses neutralises both the Omicron and Delta variants of the coronavirus. Finally, the BSE Sensex rose 85.26 points or 0.14% to 61,235.30 and the CNX Nifty was up by 45.45 points or 0.25% to 18,257.80.

Above views are of the author and not of the website kindly read disclaimer