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Indian markets ticked higher for the fifth straight session on Thursday, buoyed by fag-end buying in IT stocks despite a largely downbeat trend overseas. A recovery in the rupee also boosted investor confidence. Today, markets are likely to get cautious start amid weak global cues. Traders will be concerned as Labour Ministry data shows retail inflation for farm and rural workers increased to 7.69 percent and 7.9 percent respectively in September this year. The hike was attributed to higher prices of certain food items. There will be some cautiousness as the latest payroll data released by the Employees’ Provident Fund Organisation showed that the number of fresh formal jobs created in August fell below the 1-million mark for the first time in five months, declining 11.9 per cent from July levels. However, some support may come later in the day as foreign institutional investors (FIIs) net bought equities worth Rs 1,864.79 crore on 20 October, according to the provisional data available on the NSE. Traders may take note of a report that the Centre has exuded confidence that the prices of pulses and onions - the two main commodities which seasonally show a spike with the advent of winter - wouldn’t rise much this year, assuring it has adequate stocks in the event of a market intervention. Meanwhile, industry body CII has suggested the government a number of measures, including lowering freight and power costs for exporters and setting up a shipping regulator, to promote outbound shipments. Banking stocks will be in limelight as data from the Reserve Bank of India (RBI) showed that bank credit rose by 17.94 per cent year-on-year (YoY) to Rs 128.6 trillion as of October 7 to reflect festive and quarter-end demand. Deposits at banks increased 9.62 per cent YoY to Rs 172.72 trillion as of October 7. There will be some buzz in telecom industry stocks with a private report that telecom companies are expected to witness steady revenue growth in Q2FY23 with slight sequential uptick in average revenue per user albeit softer net additions, while SUC (spectrum usage charges) savings are seen lifting margins. Defence industry stocks will be in focus as terming exports as a key pillar for long-term sustainability of the domestic defence industry, Defence Minister Rajnath Singh said the government has set itself a target of achieving defence exports of $5 billion by 2025. He also said the government was eyeing overall turnover of USD 22 billion in defence production in the same timeframe. There will be some reaction in coal industry stocks as Coal minister Pralhad Joshi said that the import of dry fuel which has declined considerably will be stopped by 2024. Investors will continue to track the quarterly earnings season. Index heavyweights, Reliance Industries and Hindustan Unilever are due to report July-September quarter (Q2FY23) results today.

The US markets ended lower on Thursday after investors weighed generally upbeat earnings against the prospect that the Federal Reserve could hold firm on its aggressive policy for longer than they had hoped. Asian markets are trading mostly in red on Friday as investors awaited inflation data from several economies.

Back home, Indian equity benchmarks erased their initial losses and managed to end in green on Thursday helped by gains in Oil & Gas, Utilities and Power stocks. Key gauges made negative start following weak global market trends and continuous foreign fund outflow. As per exchange data, foreign institutional investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 453.91 crore. Some pessimism also came as private report stated that India's economy will grow well below its potential over the next two years, with inflation staying above the mid-point of the Reserve Bank of India's tolerance band despite recent interest rate rises. Traders got anxious as Fitch Ratings said that India's external finances are becoming 'less of a strength' but continue to be sufficient to cushion risks emanating from abroad. The comments by Fitch, which rates India at BBB-with a stable outlook, come amid a sharp decline in the country's foreign exchange reserves, which have been deployed by the Reserve Bank of India (RBI) to stem a rapid fall in the rupee. However, bargain buying at the fag-end of the session helped benchmark indices erase losses and end higher. Traders also found some solace with RBI Monetary Policy Committee (MPC) member Ashima Goyal’s statement that the efforts of the Reserve Bank to contain price rise by repeatedly increasing interest rates will help in containing inflation, which is likely to fall below 6 per cent next year. Goyal further said that the policy rate hikes have largely reversed pandemic-time cuts but the real rate remains low enough not to hurt the growth recovery. Additional support also came with Subhrakant Panda, senior vice president of the Federation of Indian Chambers and Commerce and Industries (FICCI) stating that the Indian industry is ready to catch the momentum of the country’s growth story and be a part of its march to 2047 to become a developed nation. He said India has emerged as a bright spot in the world economy. Traders took note of report that negotiations for the proposed trade pact between India and the UK are moving in the right direction, and both sides are expected to reach an agreement soon. India and the UK are negotiating the pact to boost trade and investments between the countries. Finally, the BSE Sensex rose 95.71 points or 0.16% to 59,202.90 and the CNX Nifty was up by 51.70 points or 0.30% to 17,563.95.

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