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Indian markets off their day’s lows and ended lower with over half a percent cut on Monday amid concerns that a bigger crisis is brewing in the global financial system. Today, the markets are likely to get positive start amid firm global cues. Traders will be taking encouragement as the Finance Ministry said Indian economy is expected to grow at 7 per cent in FY23 despite global headwinds while retail inflation would moderate in line with wholesale inflation which fell to a 25-month low in January. Monthly Economic Review by the ministry said supported by the gains from high services exports, the moderation in oil prices, and the recent fall in import-intensive consumption demand, India's current account deficit is estimated to fall in FY23 and FY24, providing a buffer to the rupee in uncertain times. However, foreign fund outflows may dent sentiments in the domestic markets. the National Stock Exchange’s provisional data showed foreign institutional investors (FII) sold shares worth Rs 2,545.87 crore on March 20. Some cautiousness may come as fresh formal job creation declined for the second straight month in January, falling to a 20-month low, signalling pressure in the job market. The latest payroll data released by the Employee Provident Fund Organisation (EPFO) showed that the number of new monthly subscribers under the Employees’ Provident Fund (EPF) has declined by 7.5 per cent to 777,232 in January 2023 from 840,372 in December 2022. There will be some buzz in the aviation industry stocks with report that during January-February of this year, domestic airlines carried 2.46 crore passengers as against 1.41 crore in the corresponding period of 2022, thereby registering an annual growth of 74.50 per cent and monthly growth of 56.82 per cent. According to data published by the Directorate General of Civil Aviation (DGCA), nearly 1.21 crore passengers were carried by the domestic airlines in February as against 76.96 lakh in the same period last year. Oil & gas industry stocks will be in focus with report that the Centre slashed the windfall tax on locally-produced crude oil to Rs 3,500 per tonne from Rs 4,400 per tonne earlier. However, it hiked the export duty on diesel from Rs 0.50 per litre to Rs 1 per litre. Banking stocks will be in limelight with report that the government has taken various reforms following which asset quality of public sector banks has improved significantly with gross NPA ratio declining from the peak of 14.6 per cent in March 2018 to 5.53 per cent in December 2022.

The US markets ended higher on Monday after a deal to rescue Credit Suisse and central bank efforts to bolster confidence in the financial system relieved investors, while participants also weighed the likelihood of a pause in rate hikes from the Federal Reserve this week. Asian markets are trading in green on Tuesday after markets on Wall Street staged a relief rally on the hopes that the banking crisis is easing, following the $3.2 billion takeover of Swiss bank Credit Suisse by rival UBS.

Back home, Indian equity benchmarks ended with losses, however, at off day's low points on Monday. Key gauges made a negative start and roiled in global rout for better part of the day as fears of a contagion banking sector failure soured sentiment. Traders were concerned with former Union finance minister P Chidambaram's statement that India is growing but the sequential quarter growth is declining and the economy is ‘losing steam’. Some cautiousness came in as the Reserve Bank of India's (RBI) statistical supplement showed India's foreign exchange reserves fell to $560 billion as of the week ended March 10, their lowest since early-December. Sentiments remained down-beat as Reserve Bank of India (RBI) governor -- Shaktikanta Das has cautioned banks against any build-up of asset-liability mismatches, saying both are detrimental to financial stability and hinted that the ongoing crisis in the US banking system seems to have emanated from such mismatches. However, fag-end buying in FMCG stocks along with positive cues from European markets lifted benchmark indices sharply off lows, helping them recoup more than half of their intra-day losses. Traders found some respite as the Organisation for Economic Cooperation and Development (OECD) revised upwards its growth estimate for India by 20 basis points to 5.9 per cent for FY24. Some support also came as Prime Minister Narendra Modi said India's economic and banking system are strong even amid the turmoil currently rocking global markets. Traders took a note of report that India and the European Union (EU) concluded the fourth round of talks for a comprehensive free trade agreement in Brussels, a move aimed at further strengthening economic ties between the two sides. Finally, the BSE Sensex fell 360.95 points or 0.62% to 57,628.95 and the CNX Nifty was down by 111.65 points or 0.65% to 16,988.40.

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