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Indian markets tumbled on Wednesday, along with global peers, on resurgent worries that the US Federal Reserve may have to raise interest rates more than what the Street has been factoring in. Today, markets are likely to get flat-to-positive start on a monthly F&O expiry day amid mixed cues from global peers.  Some support will come as ahead of the meeting of G20 finance ministers and central bank governors in Bengaluru, the International Monetary Fund (IMF) reiterated that India's strong performance remains a bright spot in an uncertain global economy. Traders may take note of International Monetary Fund Managing Director Kristalina Georgieva’s statement that India, which has taken it upon itself to be carbon neutral by 2070, could achieve this ambitious goal even earlier. However, foreign fund outflows likely to dent sentiments in domestic markets. Foreign institutional investors (FII) sold shares worth Rs 579.82 crore on February 22, NSE’s provisional data showed. Traders may be concerned as the latest Department for Promotion of Industry and Internal Trade data showed that foreign direct investment (FDI) into India declined by 15 per cent to $36.75 billion during the April-December this fiscal. The FDI inflows stood at $43.17 billion during the corresponding period of the previous year. There may be some cautiousness as the minutes of the Monetary Policy Committee (MPC)’s Feb 6-8 meeting showed an increasing degree of concern among most members over persistent inflationary pressures, with the rate-setting panel largely flagging stubbornly high core inflation. Coal industry stocks will be in focus as the coal ministry said that 27 coal mines would be put on sale in the next round of commercial mines auction starting from February 27.  There will be some reaction in power generating companies’ stocks with report that power generating companies that incur high variable costs due to fuel expenses and other charges will soon able to sell electricity at a price of up to Rs 50 per unit on energy exchanges.

The US markets ended mostly in red on Wednesday as Federal Reserve officials hinted that there were signs of inflation coming down, but not enough to pause more rate hikes. Asian markets are trading mixed on Thursday tracking weakness on Wall Street overnight.

Back home, Dalal Street suffered deep losses on Wednesday, with both Sensex and Nifty ending near their intraday low points, as bears held a tight grip over the markets. Investors await an official quarterly reading of India's GDP for more clarity on the state of the economy and the future course of interest rates. After a negative start, weakness persisted for the whole trading day, as traders got concerned after the State Bank of India (SBI) projected a GDP growth of 4.6% for the December quarter, citing that as many as 30 high frequency indicators are not as robust as they were in the previous quarters. Besides, India Ratings projected a dip in FY24 growth to 5.9%, lower than Reserve Bank's 6.4%. Losses got intensified during the second half of the trading session, amid weakness across global markets. Russia's nuclear rhetoric and the threat of world war remained on the minds of investors. Domestic sentiments remained negative, amid a private report stating that the Reserve Bank of India will increase its main interest rate by 25 basis points to 6.75% in April and then pause until the end of 2023. Traders took a note of another private report stating that the Indian rupee's expected volatility against the dollar over the next one month hit its lowest level in almost seven months on Tuesday, February 21, tracking the currency's recent narrow trading range and on expectations of the central bank's continued support. Finally, the BSE Sensex fell 927.74 points or 1.53% to 59,744.98 and the CNX Nifty was down by 272.40 points or 1.53% to 17,554.30.

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