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Indian equity markets settled higher for third straight day on Tuesday with Nifty and Sensex settling above the psychological 17450 and 58900 levels respectively. Today, markets are likely to make slightly positive start on firm global cues and falling crude oil prices. Support may come as Icra Ratings said that the cost of market borrowing for states declined sharply on Tuesday with the weighted average cut-off falling by 11 basis points to 7.72 per cent from 7.83 per cent last week. Nine states raised Rs 16,900 crore through state government securities (SGS) on Tuesday -- 10 per cent lower than the Rs 18,700 crore indicated for this week in the third quarter auction calendar.Meanwhile, kickstarting stakeholder consultation for 2023-24 Budget, the finance ministry has sought suggestions from industry and trade associations regarding direct and indirect taxes. Along with the suggestions, the industry has to submit justification for their demand which, if found with merit, could become part of the Union Budget for 2023-24 (April-March), to be tabled in Parliament on February 1, 2023. Traders may take note of report that Tuhin Kanta Pandey, secretary in the Department of Investment and Public Asset Management, said the Indian government should focus on privatisation of state-run companies instead of chasing high divestment targets, pointing to market volatility and investors’ shaky appetite for risk. There will be some action in agriculture related stocks as government said the hike in the minimum support price of several Rabi crops will further energise the agriculture sector. The government hiked the minimum support price (MSP) of six Rabi crops by up to 9 per cent, with Rs 110 per quintal increase for wheat crop to boost domestic production and farmers’ income. Wheat MSP has been raised by 5.45 per cent to Rs 2,125 per quintal from Rs 2,015 per quintal to encourage more area under the crop amid tight government stock position owing to low procurement, fall in production and higher exports. There may be some buzz in FMCG stocks as private report stated that India is examining whether there is a need to raise palm oil import taxes as part of efforts by the world’s biggest vegetable oil importer to help millions of its farmers reeling from lower oilseed prices.

The US markets ended higher on Tuesday as strong corporate earnings reports helped extend a rally to start the week. Asian markets were trading mostly higher in early deals on Wednesday following the broadly positive cues from US markets overnight, as traders picked up battered stocks at a bargain following the recent market weakness.

Back home, continuing their gaining streak for the third straight session, Indian equity benchmarks closed higher on Tuesday helped by the strength in Asian peers. Key gauges made positive start and stayed in green for whole day, as traders took support with RBI Monetary Policy Committee (MPC) member Jayanth R Varma’s statement that No doubt inflation will come down. Because we have done monetary policy tightening. That tightening will have its impact. The monetary policy takes, you know, five to six quarters to have its impact and cool prices. Some support also came in as a new Multidimensional Poverty Index (MPI) released jointly by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford showed that the number of people living below the poverty line in India decreased by 415 million between 2005-06 and 2019-21. Sentiments remained up-beat in late afternoon session, taking support from the Reserve Bank of India’s (RBI) monthly bulletin stating that India is poised to consolidate and accelerate the economic recovery over the rest of the year and the fight against inflation will be dogged and prolonged. The bulletin said that the momentum of real GDP growth is expected to shed the drag embedded in the NSO’s estimates for the first quarter of 2022-23 and move into positive territory in the remaining quarters. Traders overlooked Prime Minister Narendra Modi expressed concern over the huge edible oil and fertilisers import bill, which is putting pressure on the exchequer, saying it is time to work in mission mode to make India self-reliant and reduce import dependence. Modi said it was necessary to become AatmaNirbhar or self-reliant because problems in the exporting countries directly hit import prices for India as happened after the outbreak of the Russia-Ukraine war. Finally, the BSE Sensex rose 549.62 points or 0.94% to 58,960.60 and the CNX Nifty was up by 175.15 points or 1.01% to 17,486.95.

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