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Indian markets finished 1.4 percent higher on Monday, led by broad-based gains. Today, the markets are likely to make optimistic start following positive global cues. All eyes today will be on the Union Budget, which will be presented by Finance Minister Nirmala Sitharaman in the Parliament at 11 AM. This year's Union Budget will also be presented in paperless form. Traders will be taking encouragement as GST collection in January crossed Rs 1.38 lakh crore in January, a growth of 15 per cent over the year-ago period. The Finance Ministry said total number of GSTR-3B returns filed up to January 30, 2022 is 1.05 crore that includes 36 lakh quarterly returns. Some support will come as India’s eight core sectors grew by 3.8 percent in December 2021 compared to 3.4 percent in November 2021. According to data provided by the commerce ministry, coal output rose by 5.2 percent, while that of refinery products increased by 5.9 percent. The increase in output in December 2021 was largest for natural gas, which posted an increase of 19.5 percent. Cement followed closely, with its output rising 12.9 percent. However, there may be some cautiousness as India's Gross Domestic Product (GDP) contracted by 6.6 percent in FY21, according to the National Statistical Office's first revised estimate released on January 31. The revised estimate compares favorably with the provisional estimate of a 7.3 percent contraction, released in May 2021. Traders may be concerned as data released by the Controller General of Accounts showed that the Centre's fiscal deficit rose to 50.4 percent of the FY22 target in April-December 2021, with a huge increase seen in tax collections as well as capital expenditure for the month of December 2021. Meanwhile, according to the latest data from the Reserve Bank of India (RBI), banks' non-food credit growth accelerated to 9.3 percent in December from 6.6 per cent in the same period of the last year. Auto companies are likely to be in focus as they will release their respective January auto sales numbers.

The US markets ended higher on Monday for a second session to wrap up a rough January on the back of buying in tech shares. Asian markets are trading in green on Tuesday tracked strength in Wall Street indices overnight.

Back home, Indian equity benchmarks ended higher with gains of over a percent on Monday, taking positive cues from global markets and favourable takeaways from the Economic Survey report. All eyes were now on the upcoming Union Budget, to be presented by the Finance Minister in Parliament on February 1. Markets opened gap up and continued to trade on a buoyant note, as traders took encouragement with the Federation of Indian Chambers of Commerce & Industry (FICCI) in its latest quarterly survey on Manufacturing revealed that the outlook for India’s manufacturing sector seems to have improved in the October-December 2021 quarter even as the cost of doing business remains a cause for concern and hiring prospects remain subdued. The findings of the latest survey also reflect sustained economic activity in the sector, with existing average capacity utilisation in the range of 65 to 70 per cent. Traders also found some solace with Apparel Export Promotion Council (AEPC) Chairman Narendra Goenka stating that the Council is looking at new markets such as Latin America, Australia, and Israel to push the country's apparel exports, which are expected to record healthy growth during the current fiscal and in 2022-23, even though rising raw material prices are impacting the industry. The frontline indices were seen extending gains in noon deals, after the pre-Budget Economic Survey said India's economy is expected to grow by 8-8.5 per cent in the fiscal beginning April 1 and is well placed to meet the future challenges on the back of widespread vaccine coverage, supply-side reforms and easing of regulations. It also said with forex reserves of over $630 billion and plenty of ''policy room'' to deal with the situation, India can withstand normalisation of monetary policy by central banks of large economies like the US Federal Reserve. Market participants overlooked data showing that investments in Indian capital through participatory notes (P-notes) rose to Rs 95,501 crore till December-end and experts believe that flow is expected to be flat to negative next month. According to Securities and Exchange Board of India data, the value of P-note investments in Indian markets -- equity, debt and hybrid securities -- was at Rs 95,501 crore by December-end as compared to Rs 94,826 by November-end. Finally, the BSE Sensex rose 813.94 points or 1.42% to 58,014.17 and the CNX Nifty was up by 237.90 points or 1.39% to 17,339.85.

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