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Indian markets ended higher on Wednesday, but off day's highs, as the RBI announced a smaller 25-basis points rate hike and said that domestic banks' exposure to the Adani Group is not very significant. Today, markets are likely to get cautious start amid mixed global cues. Also, there may be some volatility in the markets amid weekly F&O expiry later in the day. Continued selling by foreign investors likely to dampen sentiments in the domestic markets. As per provisional data available on the NSE, foreign institutional investors (FII) sold shares worth Rs 736.82 crore on February 8. There will be some cautiousness with a private report that after delivering the seventh hawkish policy on Wednesday the central bank may pause after delivering a likely 25 basis points increase in the April review. However, some support may come as B B Swain, Secretary to the Union Ministry for Micro, Small and Medium Enterprises (MSMEs), stating that the Centre has acknowledged MSMEs' contribution to the country's economic growth, and the Budget 2023-24 has given a boost to the fund-starved sector with higher credit flow and by simplifying compliances. Meanwhile, SEBI has notified rules asking all market intermediaries and companies to make regulatory payments to it by way of direct credit into the bank account through digital payment systems. There will be some buzz in the railways stocks with report that the Railways has earned more than Rs 600 crore through convenience fee, which it retains from passengers on the cancellation of a ticket, so far in 2022-23. Coal industry stocks will be in focus with report that demand for coal is estimated to reach 1,087 million tonne in the ongoing financial year. As against the increased coal demand, domestic production of the fossil fuel has also increased. There will be some reaction in oil & gas industry stocks with report that India's fuel demand slipped in January after hitting a nine-month peak in December, hit by lower mobility due to cold weather in parts of the country and a slowdown in industrial activity. There are many companies including Hindalco Industries, Hindustan Petroleum Corporation, Life Insurance Corporation of India, Lupin, Zomato, Adani Total Gas, Aurobindo Pharma, Bajaj Consumer Care, Greaves Cotton, Hindustan Aeronautics, Indian Railway Catering and Tourism Corporation, Jet Airways, Page Industries, Suzlon Energy, United Breweries, Ujjivan Financial Services, and Voltas to report their quarterly earning later in the day.

The US markets ended lower on Wednesday paring most of the previous session's strong gains, with tech-focused shares leading the way lower. Asian markets are trading mixed on Thursday as investors assessed further risks of more rate hikes to come.

Back home, Indian equity markets resumed northward journey after two days of subdued move and gained over half a percent on Wednesday, supported by upbeat global cues. After the positive start, the markets gradually inched higher as the day progressed after the Reserve Bank of India’s Monetary Policy Committee (MPC) decided to increase the repo rate by 25 basis points to 6.5%. The central bank pegged the GDP growth for FY24 at 6.4 per cent, and lowered the inflation forecast to 5.3 per cent. For FY23, the inflation estimate has been lowered to 6.5 per cent versus 6.7 per cent earlier. Some support also came as Niti Aayog member Arvind Virmani, appreciating Finance Minister Nirmala Sitharaman for continuing fiscal consolidation in the Budget for 2023-24, said it would help in reducing the cost of capital for Indian companies. He also said the large increase in capital expenditures by 33 per cent to Rs 10 lakh crore for infrastructure development will accelerate India's economic growth. Sentiments remained up-beat in late afternoon deals, taking support from RBI Deputy Governor MK Jain’s statement that domestic banks' exposure to the Adani Group is ‘not very significant’, and the system is strong and large enough to not get impacted by a single case. Traders took a note of Reserve Bank Governor Shaktikanta’s statement that the Current Account Deficit (CAD), a key indicator of the external sector, is expected to moderate in second half of 2022-23 (H2FY23) from 3.3 per cent of GDP in April-September mainly due to moderation in imports. He noted that CAD had widened to 3.3 per cent of GDP in first half of 2022-23 from 0.2 per cent in the comparable period of 2021-22 on the back of a sharp increase in the merchandise trade deficit. Meanwhile, provisional data available on the NSE showed that foreign institutional investors (FII) sold shares worth Rs 2,559.96 crore on February 7. Finally, the BSE Sensex rose 377.75 points or 0.63% to 60,663.79 and the CNX Nifty was up by 150.20 points or 0.85% to 17,871.70.

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