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Indian markets failed to hold gains on Tuesday, witnessing a volatile trading session that forced Sensex, Nifty to close in red. Today, markets are likely to start the session on a positive note on better-than-expected macro-economic data amid gains across other Asian markets coupled with fall in crude oil prices. Investors will be eyeing Manufacturing PMI data to be out later in the day. Sentiments will get a boost as India's gross domestic product (GDP) in the second quarter of the fiscal year 2021-22 grew at 8.4 percent. The numbers mark a significant increase as compared to the COVID-19-hit second quarter of last fiscal year, when the GDP had declined by 7.4 percent. Besides, S&P Global Ratings kept India’s economic growth forecast in the fiscal year to March 2022 unchanged at 9.5 per cent but raised its predictions for the subsequent year on broadening out of the recovery. Some support will come with government data showing that the combined output of eight core industries has surged by 7.5 percent in October, as compared to the same period last year. Also, the latest data from the Reserve Bank of India (RBI) showed that credit growth to industry picked up to 4.1 percent in October 2021 from a contraction of 0.7 percent in October 2020. Meanwhile, according to the data released by the Controller General of Accounts (CGA), the Union government’s fiscal deficit works out to be Rs 5.47 lakh crore or 36.3 per cent of the budget estimates at the end of October 2021 on the back of improvement in revenue collection. However, there may be some cautiousness as a periodic labour force survey by the National Statistical Office (NSO) showed that unemployment rate for all ages in urban areas rose to 9.3 per cent in January-March 2021 from 9.1 per cent in the same month of the previous year. Foreign fund outflow is likely to keep sentiments in the markets down bit. Foreign portfolio investors (FPIs) remained net sellers for Rs 5445.25 crore in the Indian markets. Auto stocks will be in limelight reacting to their sales numbers to be out later in the day. There will be some reaction in fertilizer industry stocks with a private report that India plans to increase 2021/22 fertiliser subsidies to a record of more than 1.55 trillion rupees ($20.64 billion) to avoid shortages amid a sharp increase in global prices of the chemicals. Star Health and Allied Insurance Company IPO was subscribed 12 per cent at the end of Day 1. The retail quota was subscribed 64 per cent. Tega Industries IPO will open for subscription today. The mill-liner producer’s company aims to raise Rs 619 crore and has fixed a price band of Rs 443-453 per share.

The US markets ended lower on Tuesday after Fed chairman Jerome Powell hinted of wrapping up tapering of bond purchases a few months sooner, citing inflation risk. Asian markets are trading mostly in green on Wednesday despite the broadly negative cues overnight from Wall Street, after the Japanese government stepped up virus containment measures on confirming the country's first Omicron variant case.

Back home, Indian equity benchmarks failed to hold intraday gains in a choppy session and closed the session in red terrain on Tuesday, as global cues turned bearish. Domestic benchmark indices started trade in the positive territory, as traders took encouragement with Minister of State for Finance Pankaj Chaudhary’s statement the net direct tax collection grew nearly 68 per cent during April 1 to November 23 to more than Rs 6.92 lakh crore. Some support came in as India Ratings expects the economy to grow 8.3 per cent in Q2 and close the year with 9.4 per cent in FY'22. Buying further crept in with Crisil Ratings in its latest report stated that after weathering multiple challenges over the past three fiscals, asset under management (AUM) of non-banking financial companies' (NBFCs) and housing finance companies (HFCs) is set to grow 8-10 percent in the fiscal 2023, helped by improvement in economic activity and strengthened balance sheet buffers. Some optimism also came in with private report that data was expected to show that India's economic recovery strengthened in the July-September quarter, helped by a pick-up in consumer spending, though the spread of the Omicron coronavirus variant raised fears for the future. However, the markets saw selling pressure towards fag-end of the session, as investors awaited gross domestic product (GDP) data that is expected to show the country's economic recovery strengthened in the second quarter. Traders remained cautious amid report that seven people arrived from South Africa in Maharashtra’s Thane city adjoining Mumbai since November 14 and all of them were tested in the wake of concerns over the new potentially more transmissible 'Omicron' variant of the coronavirus. Some cautiousness also crept in as Moody’s Analytics said the Omicron variant of COVID-19 adds new uncertainties to the global economic outlook but much will depend on its speed of transmission, hospitalization and death rates, and also the effectiveness of vaccines. Finally, the BSE Sensex fell 195.71 points or 0.34% to 57,064.87 and the CNX Nifty was down by 70.75 points or 0.41% to 16,983.20.

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