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Indian markets recovered most of their intraday losses to close marginally lower on Tuesday amid buying in index majors Reliance Industries and Tata Consultancy Services despite lacklustre global cues. Today, the benchmark indices are likely to start session in green amid positive global cues. Sentiments will get a boost as the Reserve Bank of India (RBI) in its monthly bulletin for December said waning input cost pressures, buoyant corporate sales, and a turn-up in investments in fixed assets suggest the beginning of an upturn in India’s capital expenditure cycle, which could help improve earnings in the coming quarters and speed up the momentum of growth in the Indian economy. Traders will be taking encouragement as a finance ministry report said that the government remains committed towards strong macroeconomic fundamentals and financial stability despite global headwinds. The report added despite hurdles, the Indian economy has performed reasonably well as compared to other major economies and shown its resilience amidst the global slowdown and global uncertainties. Some support will come as the Fitch Ratings affirmed India’s sovereign rating at the lowest investment grade (BBB minus) with stable outlook holding that the country’s robust medium-term growth outlook is a key supporting factor. Also, foreign institutional investors (FIIs) net bought shares worth Rs 455.94 crore on December 20, as per provisional data available on the NSE. Meanwhile, investors will keep an eye on RBI MPC minutes to be released today. Sugar stocks will be in focus as trade body AISTA said India has exported 5.62 lakh tonne of sugar so far in the current 2022-23 marketing year that began in October. There will be some reaction in textile industry stocks as the Cotton Association of India (CAI) reduced the cotton crop estimate by 4.25 lakh bales to 339.75 lakh bales for the 2022-23 season, beginning from October 2022, as the production in Haryana, Andhra Pradesh and Karnataka is expected to decline. Power stocks will be in limelight as Fitch Ratings in a report said growth in the country’s power demand is likely to slow down in the second half of the financial year ending March 2023 (H2FY23), after a robust 11.3 per cent year-on-year (YoY) growth in the first half of the year (H1FY23).

The US markets ended slightly higher on Tuesday after four sessions of declines, but investors fretted about weak holiday shopping and rising bond yields added pressure after the Bank of Japan's (BoJ) surprise tweak of monetary policy. Asian markets are trading mostly in green on Wednesday tracking overnight gains on Wall Street.

Back home, Indian equity benchmarks recovered sharply from morning lows to end the Tuesday’s session with marginal losses amid buying in index majors Tata Consultancy Services and Reliance Industries. Markets made a gap down opening and languished deep in the red for the most part of the day, tracking heavy losses in Asian peers. Traders got anxious with provisional data available on the NSE showing that foreign institutional investors (FIIs) have net-sold shares worth Rs 538.10 crore on December 19, 2022. Some concern also came amid a private report stating that liquidity in the banking system has slipped into a deficit for the first time in three weeks, prompting banks to borrow the largest quantum of funds from the Reserve Bank of India (RBI) in around a month and a half. However, key gauges managed to recoup most of early losses in late afternoon deals, as traders found some solace with Union Finance Minister Nirmala Sitharaman’s statement that scheduled commercial banks have written off loans amounting to Rs 10,09,511 crore in the last five financial years and the process of recovery of dues from the borrowers continues. Some support also came with Minister of state for Micro, Small and Medium Enterprises (MSMEs) Bhanu Pratap Singh Verma’s statement that 1.31 crore people were employed in the MSMEs incorporated in the financial year 2021-22 (FY22), up by 16% as against 1.13 crore employees in the MSMEs incorporated in FY21. Finally, the BSE Sensex fell 103.90 points or 0.17% to 61,702.29 and the CNX Nifty was down by 35.15 points or 0.19% to 18,385.30.