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Indian markets climbed higher on Wednesday, rebounding strongly after weak initial few hours of trade, bucking the broad-based global trend, boosted by IT stocks as investors awaited June quarter earnings of IT major Infosys. Today, the start of session is likely to be flat-to-positive tracking similar trend in the global markets. Traders may take note of report that garment exporters will continue to get a rebate on central and state taxes on their outward shipments as the government approved extension of RoSCTL scheme till March 2024. However, there will be some cautiousness with a private report that even though the second wave has ebbed, the increased presence of the Delta variant and the subsequent mutations of the coronavirus makes the third wave a real risk for the country. Also, Credit card spends fell to an eight-month low in May amid localised lockdowns imposed by states to battle the second wave of coronavirus. The latest cards data released by the Reserve Bank of India (RBI) shows the total credit card spends fell to Rs 548 billion in May, recording a more than a 7 percent decline from Rs 592 billion in the previous month. There will be some buzz in sugar stocks as industry body Indian Sugar Mills Association (ISMA) said India’s sugar production in 2021-22 season that will start from October is expected to be around 31 million tonnes, almost similar to the current year’s production of 30.9 million tonnes, even after accounting for 3.4 million tonnes of sugar diverted for producing ethanol. Auto stocks will be in focus as Society of Indian Automobile Manufacturers (SIAM) said  passenger vehicle wholesales in India rose to 2,31,633 units in June as compared with 1,05,617 units in the same month of 2020 which saw massive COVID-19 related disruptions. However, separately, it said rising fuel prices will have a negative impact on the automobile industry, hitting vehicle demand, while also adding to the overall inflationary pressure. There will be some reaction in shipping companies stocks as the Union Cabinet approved a scheme to provide Rs 1,624 crore over five years as subsidy to Indian shipping companies in global tenders floated by ministries and CPSEs for import of government cargo.

The US markets ended mostly higher on Wednesday amid investors weighed the latest corporate earnings reports and the Federal Reserve chairs comments on inflation. Asian markets are trading mixed on Thursday as investors await China’s second-quarter GDP data.

Back home, Indian equity benchmarks ended in green on Wednesday tracking gains mainly in IT, TECK and Capital Goods stocks. The benchmarks opened lower taking cues from weak Asian markets. Traders remained cautious with rising coronavirus cases in the country. India has recorded a spike of 40,215 fresh Covid-19 cases in the last 24 hours, taking the total caseload to 30,944,949, according to Worldometer. The death count increased to 411,439 with 623 new fatalities, the data showed.  However, markets soon staged sharp recovery, taking support from report that the government may extend the scheme for investment promotion 2017-20, with an aim to attract investors and promote economic growth of the country. Sentiments remained positive as wholesale price-based inflation eased marginally to 12.07 per cent in June as crude oil and food items witnessed some softening in prices. However, WPI inflation remained in double digit for the third consecutive month in June, mainly due to a low base of last year. WPI inflation was (-) 1.81 per cent, in June 2020. Traders took note of report that global rating agency Standard and Poor’s has affirmed India’s sovereign rating at BBB- and maintained a stable outlook on gradual recovery in the economy. It said India’s recovery will gather pace through the second half of FY22 and into the following year, helping to stabilise the country’s overall credit profile. Meanwhile, Finance Secretary T V Somanathan has underlined the need for improving the fiscal position of the government through reforms in farm, food and fertilizer subsidies so that additional funds can be generated for development of infrastructure and education system. He said that farm, food and fertilizer reforms are administratively easy but politically difficult in view of the ramifications. Finally, the BSE Sensex rose 134.32 points or 0.25% to 52,904.05, while the CNX Nifty was up by 41.60 points or 0.26% to 15,853.95.

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