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Indian markets shrugged off initial weakness and ended higher on Tuesday amid robust buying in heavyweights like HDFC Bank, Reliance Industries, Kotak Bank. Today, markets are likely to continue previous session’s rally with positive start tracking firm global cues. Sentiments will get a boost as the Reserve Bank of India said India's current account deficit narrowed in the July-September quarter largely due to a lower merchandise trade deficit while services exports also grew. The current account deficit stood at $8.3 billion, or 1% of GDP, in the second quarter of fiscal 2023-24 as compared to $9.2 billion or 1.1% of GDP in the preceding quarter. The CAD stood at $30.9 billion or 3.8% in the same quarter a year ago. Some support will come with a report that as many as 746 applications have been approved till November 2023 under the Production Linked Incentive (PLI) schemes for 14 sectors such as pharma, white goods, and electronics. The schemes for 14 sectors were announced with an outlay of Rs 1.97 lakh crore to enhance India's manufacturing capabilities and exports. Traders may take note of report that the negotiations for the proposed free trade agreement (FTA) between India and Oman are moving at a fast pace and the pact is likely to be signed next month. Besides, the department for promotion of industry and internal trade (DPIIT) is working with 24 sub-sectors, including furniture, aluminium, agrochemicals and textiles, to promote domestic manufacturing, boost exports and reduce imports. The commerce and industry ministry said that since its launch, Make in India has made significant achievements and is now focusing on 27 sectors under Make in India 2.0. However, traders may be concerned as ratings agency India Ratings and Research said India’s fiscal deficit is likely to breach the government’s target of 5.9% in FY24 owing to higher revenue expenditure and lower than budgeted nominal GDP. It noted that although higher tax and non-tax revenue collections may offset the shortfall in divestment earnings, a likely second supplementary demand for grants will upset fiscal calculations, pushing the deficit to 6% of GDP. IT stocks will be in focus as a report by industry body Nasscom showed that nearly 60 per cent of businesses surveyed reported having either matured Responsible AI (RAI) practices and policies or having initiated formal steps towards adoption of such responsible practices. Meanwhile, Happy Forgings, Credo Brands Marketing (Mufti Menswear) and RBZ Jewellers are slated to debut on the exchanges today.

The US markets ended higher on Tuesday kicking off the final week of 2023 with expectations that the Federal Reserve will begin cutting interest rates as soon as March. Asian markets are trading mostly in green on Wednesday on a positive handover overnight from Wall Street, coupled with a rally in Chinese gaming stocks.

Back home, Indian equity benchmarks ended higher for the third consecutive session on Tuesday amid robust buying in heavyweights like NTPC, Mahindra & Mahindra and Wipro. Markets made cautious start as a surge in new Covid-19 cases weighted down on the sentiments. India logged a total of 628 new Covid-19 cases in the last 24 hours, while the active caseload jumped to 4,054. However, markets soon gained traction and traded higher as sentiments turned optimistic with Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh stating that foreign direct investments into India is likely to gather momentum in 2024 as healthy macroeconomic numbers, better industrial output as well as attractive PLI schemes will attract more overseas players amid geopolitical headwinds and tighter interest rate regime globally. Some comfort also came with Union Food and Consumer Affairs Minister Piyush Goyal’s statement that the Centre has taken many proactive steps in the past few years to control retail prices of food items, and that the government would keep inflation under control while ensuring the country's economic growth. Markets maintained their gains in late afternoon session, taking support from a private report stating that the Indian economy is likely to grow 6.7% in FY24, staying resilient despite external headwinds as domestic demand and improving investments provide support. Some support came with report that credit rating firm Fitch Ratings expects that India’s resilient economic growth will boost demand of the corporates. It said rising demand and easing input cost pressure should boost margins of the corporates in the next financial year. Adding to the optimism, foreign portfolio investors (FPIs) have injected over Rs 57,300 crore into the Indian equity markets this month so far owing to political stability, robust economic growth, and a steady decline in the US bond yields. Finally, the BSE Sensex rose 229.84 points or 0.32% to 71,336.80 and the CNX Nifty was up by 91.95 points or 0.43% to 21,441.35.

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