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Indian markets ended lower on Wednesday as a combination of foreign portfolio investors (FPIs) selling and a decline in index majors weighted on market sentiments. Loses in financial and oil, gas shares pulled the headline indices lower. Today, markets are likely to get positive start tracking gains in global markets. Traders will be taking encouragement with a private report lowering its projection for India's current account deficit (CAD) to 2.9% of gross domestic product (GDP) for the current fiscal year, citing the growth in the country's service exports and a lower oil price forecast. Some support will come as Bibek Debroy, chairman, Economic Advisory Council to the Prime Minister, said India's GDP will be close to USD 20 trillion by 2047 and per capita income may reach USD 10,000 (at current value of USD). Meanwhile, India and France are expected to take stock of their overall security cooperation during a high-level dialogue on January 05. However, continued foreign fund outflows likely to limit upside. Foreign institutional investors (FII) sold shares worth Rs 2,620.89 crore on January 4, as per provisional data available on the NSE. The weekly F&O expiry may lead to volatility in the markets today. Also, the markets would react to the FOMC minutes released overnight which suggests that the Fed will remain aggressive in its policy to control inflation. Some banking stocks will be in focus with a report that private sector banks are expected to report healthy growth in earnings during the October–December quarter of FY23. This would be aided by robust credit growth, margin expansion, benign credit costs, and lower provisioning burden. However, operational costs may remain high due to investment in businesses. There will be some reaction in tyre industry stocks Automotive Tyre Manufacturers Association said the Indian tyre industry will be able to scale a turnover of Rs 1 lakh crore in the next three years on the back of new capacities available.

The US markets ended higher on Wednesday after a choppy session as investors looked past Federal Reserve meeting minutes that showed the central bank will remain aggressive in its policy to tame high inflation. Asian markets are trading mostly in green on Thursday following a higher close on Wall Street.

Back home, snapping their two-day gains, Indian equity benchmarks traded under pressure and finally settled around the day’s low points on Wednesday amid selling across the sectors. After the flat start, key gauges gradually inched lower as the day progressed amid foreign fund outflows. Foreign institutional investors (FII) sold shares worth Rs 628.07 crore on January 3, as per provisional data available on the NSE. Market participants awaited a slew of U.S. data and the latest FOMC meeting minutes this week for additional clues on when and where interest rates might peak. Traders took a note of report that Micro-Finance Institution Network (MFIN), a self-regulatory organisation (SRO) recognised by RBI, said that outstanding loan portfolio of the micro-finance institution (MFI) sector across India will increase around 20.3 per cent at Rs 3.25 lakh crore in 2022-23 compared to the previous fiscal. Markets managed to trim some losses in late afternoon deals, taking support from reports that India’s services sector growth expanded further in the month of December, with a quicker upturn in new business boosting output growth. More jobs were created and companies remained strongly upbeat towards the year-ahead outlook for business activity. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 58.5 in December from 56.4 in November. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- improved to 59.4 in December from 56.7 in November. However, markers failed to hold recovery and ended with sharp cuts as traders shifted focus towards the upcoming quarterly earnings season, with IT giant TCS likely to unveil its earnings on January 9. Finally, the BSE Sensex fell 636.75 points or 1.04% to 60,657.45 and the CNX Nifty was down by 189.60 points or 1.04% to 18,042.95.

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