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Indian markets buckled under selling pressure for the fifth straight session on Thursday as a bearish trend in Asian markets and concerns over rate hikes by the US Federal Reserve (Fed) unnerved investors. Today, markets are likely to open higher tracing global cues. Traders will be taking encouragement as the monthly economic review for January 2023 released by the finance ministry showed that despite the global economy operating under an extremely challenging macroeconomic environment like the geopolitical tensions in Europe, spiralling energy, food and fertiliser prices, monetary tightening and inflationary trends having elevated the downside risks to the global economic outlook, the Indian economy is estimated to grow by 7 per cent year-on-year in the current fiscal. Traders may take note of External Affairs Minister S Jaishankar’s statement that India is ‘15 per cent of the solution’ the G20 is looking for in terms of economic growth and development. The minister cited managing director of the International Monetary Fund Kristalina Georgieva's statement that in ‘otherwise a fairly gloomy global economic scenario’ India's GDP base is growing at seven percent and is likely to increase in the coming decade. However, a rebound in oil prices and concerns over FII outflows may weigh on trading sentiments. Foreign institutional investors (FII) sold shares worth Rs 1,417.24 crore on February 23, the National Stock Exchange's provisional data showed. There may be some cautiousness as the finance ministry raised concerns over the possible impact of El Niño conditions on India this year, saying if recent forecasts came true, the country could see lower agricultural output and higher inflation. There will be some buzz in the sugar stocks with a private report that Fitch Solutions said it sees raw sugar prices averaging 2% higher this year as production will likely disappoint in various regions including Europe and India, while demand in China should recover. Banking stocks will be in focus with another private report that Indian banks could see an increase in bad loans in the retail and small business segments from its recent low levels.

The US markets ended higher on Thursday as investors grappled with how interest rate policy might affect the US economy. Asian markets are trading mostly in green on Friday as the nominee to lead the Bank of Japan Kazuo Ueda spoke at confirmation hearing.

Back home, Thursday turned out to be a choppy day of trade on the Dalal Street, with both Sensex and Nifty closing lower, as the Reserve Bank of India (RBI) and Fed minutes revealed that they are willing to keep increasing the interest rates as inflation remains a concern. After a slightly positive start, markets cut gains and traded volatile during the day, amid foreign fund outflows. Foreign institutional investors (FII) sold shares worth Rs 579.82 crore on February 22, NSE’s provisional data showed. Adding more worries among traders, the latest Department for Promotion of Industry and Internal Trade data showed that foreign direct investment (FDI) into India declined by 15 per cent to $36.75 billion during the April-December this fiscal. Despite high volatility, indices managed to keep their heads above water for the most part of the session, as some support came with a report that ahead of the meeting of G20 finance ministers and central bank governors in Bengaluru, the International Monetary Fund (IMF) reiterated that India's strong performance remains a bright spot in an uncertain global economy. But at the end, the day ended in red. There was cautiousness in the markets, as according to the minutes of the meeting, majority of members of the high-powered Monetary Policy Committee (MPC) of the Reserve Bank were concerned about heightened inflation even as two panellists raised objections against an increase in the benchmark interest rate. Finally, the BSE Sensex fell 139.18 points or 0.23% to 59,605.80 and the CNX Nifty was down by 43.05 points or 0.25% to 17,511.25.

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