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Indian markets ended at their record highs on Thursday amid the US Federal Reserve's dovish pivot, and forecasts of rate cuts in 2024. Today, domestic indices are likely to continue their previous session’s bull run with optimistic start as the prospect of deep rate cuts from central banks next year boosted global sentiment. Traders will be taking encouragement with report that net direct tax collection in the eight months of the current fiscal touched 58.34 per cent of Budget Estimates (BE) at Rs 10.64 lakh crore. The Ministry of Finance said the net tax collection for April-November stood at Rs 10.64 lakh crore, which is 23.4 per cent higher than the corresponding period of last year. Some support will come with India Ratings’ report that the liquidity conditions in the Indian banking system are expected to see substantial improvement from January 2024, owing to a surge in government spending ahead of the vote on account and Foreign Portfolio Investment (FPI) flows in equity markets. It added that the liquidity surplus could touch up to Rs 50,000 crore. Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has released an Exposure Draft proposing to increase the surrender value of non-linked life insurance policies. The surrender value is the amount that the policyholder receives from the insurance company if they decide to terminate their policy before its maturity. There will be some buzz in the automobile industry stocks as S&P Global Mobility forecast showed that India has been the fastest growing among the world's 10 largest automobile markets this calendar year when compared to the pre-pandemic year of 2019. India is the world’s third largest light vehicle (includes cars and light utility vehicles less than 6 tonnes) market, behind China and the United States. There will be some reaction in logistics industry stocks as quick estimates of economic think-tank National Council of Applied Economic Research (NCAER) showed that the logistics cost in India ranged from 7.8 per cent to 8.9 per cent of GDP in 2021-22. In a report on the logistics cost, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said that the government has released a national logistics policy to reduce the cost and enhance competitiveness of Indian industry.

The US markets ended higher on Thursday with strong retail sales data for November and hopes of deeper rate cuts next year underpinning sentiment. Asian markets are trading mostly in green on Friday as investors await key economic data out of China, including November house prices, industrial output, and retail sales data.

Back home, Indian equity benchmarks rallied over a per cent to hit record closing highs on Thursday, propelled by intense buying in Realty, IT and TECK stocks after the US Federal Reserve kept its key interest rate unchanged and signalled rate cuts next year. Markets made a gap-up start and strengthened further as the session progressed, as traders took encouragement with Asia Development Bank (ADB) stating that India’s economy would grow 6.7 per cent in Financial Year 2023-24 (FY24), raising the estimate from 6.3 per cent it made in September. The lender revised its estimate based on India’s higher-than-expected gross domestic product (GDP) growth, of 7.6 per cent, in the second quarter of FY24. Domestic sentiments remained firm with provisional data from the National Stock Exchange (NSE) showing that foreign institutional investors (FIIs) net bought shares worth Rs 4,711 crore on December 13. Sentiments remained up-beat in second half of trading session, taking support from Niti Aayog Vice Chairman Suman Bery’s statement that agriculture will play a central role in India's development trajectory as strong rural demand supports manufacturing and economic revival. Additional support came with CEO of the US-India Strategic and Partnership Forum (USISPF) Mukesh Aghi’s statement that the relationship between India and the US has moved in a positive direction ranging from trade to defence and the two nations have shown a sense of deep understating of each other's differences. Adding to the optimism, the Organisation of Petroleum Exporting Countries (OPEC) expects world oil demand to grow to 2.2 million barrels per day (bpd) in 2024 for an average of 104.4 million bpd, unchanged from its previous assessment. The oil cartel said in a report that oil demand is expected to be supported by resilient global GDP growth, amid continued improvements in economic activity in China. Traders paid no heed towards data showing that India’s inflation based on wholesale price index (WPI) rose 0.26 per cent in November from a year ago driven by the increase in prices of food articles, electricity, computer, electronics & optical products, motor vehicles, other transport equipment and other manufacturing etc. In October, the WPI inflation was -0.52 per cent. Finally, the BSE Sensex rose 929.60 points or 1.34% to 70,514.20 and the CNX Nifty was up by 256.35 points or 1.23% to 21,182.70.

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