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Indian markets ended on a positive note on Wednesday on account of value buying amid softer-than-expected inflation readings from India and the US. Today, markets are likely to continue previous session’s rally with positive start tracking overnight gains on Wall Street coupled with sharp fall in crude oil prices. Foreign fund inflows likely to aid domestic sentiments. Provisional data from the National Stock Exchange showed that foreign institutional investors net bought shares worth Rs 550.19 crore on November 15. Traders will be taking encouragement as CBDT (Central Board of Direct Taxes) Chairman Nitin Gupta said the government will exceed the Rs 18.23 lakh crore direct tax collection target set for the current fiscal. As per government data, the net direct tax collection between April 1 and November 9 this fiscal has swelled 22 per cent to Rs 10.60 lakh crore. Traders may take note of Finance Minister Nirmala Sitharaman’s statement that India is expected to overtake Japan and Germany to emerge as the third largest economy in the world by 2027. However, there may be some cautiousness as the commerce ministry said India's merchandise trade deficit rose to a record high in October, propelled by a 95 percent increase in gold imports. Insurance industry stocks will be in focus with private report that the Insurance Regulatory and Development Authority of India (Irdai) has released an exposure draft on the Expenses of Management (EoM) including a commission for both life and non-life insurance companies, based on the recommendation from the Regulation Review Committee (RRC). There will be some reaction in aviation industry stocks as the rating firm ICRA said domestic air passenger traffic is expected to rise 11 per cent year-on-year (YoY) in October, reaching 126.4 lakh compared to around 114 lakh in October 2022.  On a sequential basis, domestic air passenger traffic growth is expected up 3.2 per cent compared to 122.5 lakh in September 2023 and 3 per cent higher than pre-Covid levels of 123 lakh in October 2019.

The US markets ended higher on Wednesday with dovish Fed bets and an upbeat forecast from retailer Target helping underpin sentiment. Asian markets are trading mostly in red on Thursday as investors booked profit after hefty gains on Wednesday, and amid Biden-Xi bilateral meeting.

Back home, Indian equity benchmarks ended higher with gains of over a percent and settled near intraday high levels with frontline gauges recapturing their crucial 65,600 (Sensex) and 19,650 (Nifty) levels, amid a rally in global markets on favourable US inflation data. Key indices made gap-up opening and traded with a positive bias throughout the day as traders took encouragement with data showing that the retail inflation based on Consumer Price Index (CPI) eased for second consecutive month to a four-month low of 4.87 per cent in October 2023, in line with cooling prices of food items. This marks the second consecutive month when the consumer price index or CPI-based inflation has remained within the Reserve Bank of India’s comfort zone of below 6 per cent. Sentiments remained positive as wholesale price inflation remained in the negative territory for the seventh month in a row in October at (-) 0.52 per cent on easing prices of food items. Some support also came with SBI’s report stating that India's unemployment rate is at a record low and India's labour market is undergoing a deep structural transformation with self-entrepreneurship across all echelons and higher educational attainment emerging as key enablers. Markets added gains in late afternoon deals, as government data showed India's merchandise exports rose by 6.21 per cent to $33.57 billion in October 2023 even as trade deficit ballooned to $31.46 billion during the month. Imports increased to $65.03 billion in the month under consideration, as against $57.91 billion recorded in October 2022. Adding to the optimism, a private report said the Indian economy likely grew 6.7% in the July-September quarter, boosted by a strong performance by the services sector. It said robust manufacturing and construction activity also likely contributed to growth in the second quarter. Traders also took a note of report that Union Commerce Minister Piyush Goyal has revealed that the central government is poised to introduce a comprehensive e-commerce policy and rules. Finally, the BSE Sensex rose 742.06 points or 1.14% to 65,675.93 and the CNX Nifty was up by 231.90 points or 1.19% to 19,675.45.

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