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Indian markets extended previous session’s gains and ended higher for a second straight session on Wednesday, shrugging off mixed moves across global markets. Today, benchmark indices are likely to make negative start tracing weakness in the global markets after weak economic data from the US fueled worries about a recession and hawkish comments from Fed officials dented investor sentiment. Traders will be concerned as IMF's Gita Gopinath said the global economy is facing a unique situation due to unprecedented level of high inflation and that is causing tension between monetary and fiscal policies. Foreign fund outflows likely to dent sentiments in domestic markets. Foreign institutional investors (FII) have net-sold shares worth Rs 319.23 crore on January 18, as per provisional data available on the NSE. Further, weekly expiry of F&O may bring some volatility in the today’s session. However, some respite may come later in the day with a private report that India is likely to become a $26-trillion economy in 100th year of its Independence in 2047 with per capita GDP growing six times from current level to over $15,000 during the period. There will be some buzz in coal industry stocks as the government said that it has set a coal production target of more than one billion tonnes (BT) for the next financial year. Of the said target, state-owned Coal India has been given the task to produce 780 MT of coal. Auto industry stocks will be in focus as a report by rating agency ICRA said the domestic automotive industry is expected to grow at high single-digit levels in 2023-24. According to the report, the demand for the passenger vehicles segment is expected to grow at 6-9 per cent, commercial vehicles by 7-10 per cent, two-wheelers by 6-9 per cent and tractors by 4-6 per cent in FY24. There will be some reaction in paint industry stocks with a private report that the paints sector has been an underperformer with most listed majors shedding 17-25 per cent since their highs in August. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended lower on Wednesday as retail sales and producer prices declined more than expected in December and factory production fell more than expected. Asian markets are trading mostly in red on Thursday after tracking losses on Wall Street overnight.

Back home, Indian equity benchmarks extended gains for a second straight session on Wednesday, with the Nifty ended 112 points higher while the Sensex was up by 390 points. Recovery in most of the Asian markets and positive start in European equity exchanges added to the momentum. After making a cautious start, key gauges gained traction as foreign institutional investors turned net buyers of domestic shares, breaking their longest selling streak in six months. FIIs snapped a 17-day sales run, purchasing Rs 211 crore worth of equity shares on a net basis on January 17. Traders took a note of Former RBI governor Raghuram Rajan’s statement that it is too premature to think that India will replace China when it comes to influencing global economic growth. However, the situation may change going forward as India is already the world's fifth largest economy, it is growing and has the potential to keep expanding. Key gauges added more gains in late morning deals, as sentiments got boost with a private report stating that the government is likely to increase the allocation for the ongoing Production-Linked Incentive (PLI) schemes by as much as 20-30 per cent in the next Budget to spur domestic manufacturing and boost exports. Traders remained optimistic with IMF Deputy Managing Director Gita Gopinath’s statement that there's a lot of positive sentiment towards India. She highlighted areas that need more reforms to attract more manufacturing FDI. Additional support also came with the Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Anurag Jain’s statement that several other steps are underway on further improving ease of doing business in India, including on the labour laws front. Finally, the BSE Sensex rose 390.02 points or 0.64% to 61,045.74 and the CNX Nifty was up by 112.05 points or 0.62% to 18,165.35.

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