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Indian markets ended at new heights on Wednesday, buoyed by a global rally amid prospects of the US Federal Reserve slashing rates as early as March next year. Today, markets are likely to continue previous session’s record breaking rally with positive start to strike new highs tracking firm cues from global peers. Foreign fund inflows likely to aid sentiments. Provisional data from the NSE showed foreign institutional investors (FIIs) turned net buyers for the first time in the last seven consecutive sessions, buying shares worth Rs 2,926.05 crore on December 27. Traders will be taking encouragement as a report released by the Centre for Economics and Business Research (CEBR) showed that India is set to become the world's third-largest economy by 2032, and will eventually surpass China and the United States to become the world's largest economic superpower by the end of this century. It added India will sustain robust economic growth, averaging 6.5 percent from 2024 to 2028. Some support will come as External Affairs Minister S Jaishankar said India will begin trade negotiations with the Eurasian Economic Union (EEU) bloc of countries for a free trade deal in January. Traders may take note of the Department of Financial Services Secretary Vivek Joshi’s statement that India Inc needs to think 'big and bold', and kickstart a new private sector investment cycle. Joshi also asked banks to include stress testing of cyber risks as part of the risk assessment framework. However, some volatility may remain in the markets due to the monthly derivatives expiry in later in the day. Some cautiousness may come with a private report that private equity (PE) and venture capital (VC) investments in India fell by around 41 per cent to $27.89 billion across 697 deals in 2023 so far, compared to $47.62 billion across 1,364 deals in the previous year. Meanwhile, Sebi extended the deadline for demat and mutual fund account holders to provide a nomination to their account to June 30, 2024. Shares of Banks and non-banking financial companies (NBFCs) are likely to be in focus after RBI in its Trend & Progress Report for 2022-23 stated that the both the financial institutions remained sound and resilient with banks’ gross non-performing assets (GNPAs) at a decade-low. There will be some reaction stocks related to petroleum products as latest data released by the Petroleum Planning and Analysis Cell (PPAC) showed export of refined petroleum product imports grew 32.1 per cent in November to 5.6 million metric tonnes (mmt), up from 4.3 mmt in the year-ago month. Value-wise, exports stood at $4.3 billion in November, up from $3.8 billion a year back.

The US markets ended higher on Wednesday as treasury yields moved notably lower over the course of the session, with the yield on the benchmark ten-year note falling to its lowest level in five months. Asian markets are trading mostly in green on Thursday as market wagers on ever-more aggressive rate cuts extended a huge rally in U.S. stocks and bonds.

Back home, rising for the fourth straight session, Indian equity benchmarks ended at fresh record closing highs on Wednesday backed by strong global cues and a rally in Metal and Auto stocks. Domestic equities made a positive start and traded in a thin range for better part of the day as traders took support with the Reserve Bank of India stating that 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. Traders took 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. Markets picked pace towards the fag-end of the session to settle around the day’s high as sentiments remained up-beat 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. Some support also came as 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. Traders overlooked ratings agency India Ratings and Research’s report stating that 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. Finally, the BSE Sensex rose 701.63 points or 0.98% to 72,038.43 and the CNX Nifty was up by 213.40 points or 1.00% to 21,654.75.

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