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Indian markets ended higher for sixth straight session on Tuesday as banks and financial services saw heavy buying, lifting the benchmarks. Today, markets are likely to get flat-to-positive start amid mixed cues from global peers. Traders will be taking encouragement as economists in the Finance Ministry said with the stable downward movement in core inflation and moderation in food prices, the outlook for a reasonably low headline inflation rate is good. They said the outlook for the Indian economy appears ‘bright’ with GDP likely to grow by 7% next financial year beginning April 1 from an estimated 7.3% in the current financial year. Some support will come with report that retail inflation for farm workers and rural labourers eased marginally to 7.52 per cent and 7.37 per cent in January as compared to the previous month, mainly due to lower prices of certain food items. In December 2023, Consumer Price Index-Agricultural Labourers (CPI-AL) and Consumer Price Index-Rural Labourers (CPI-RL) was 7.71 per cent and 7.46 per cent, respectively. Besides, the latest payroll data released by the Employees' Provident Fund Organisation (EPFO) showed that the labour market recovered slightly in December as fresh formal job creation hit a three-month high. As per the data, in December 2023, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) increased by nearly 10 per cent to 840,584 in December from 762,513 in November. Traders may take note of Arvind Panagariya, chairman of the Sixteenth Finance Commission, stating that India must focus on exports to achieve a 10% growth rate for the economy. However, foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 1,335.51 crore on February 20, provisional data from the NSE showed. Also, oil prices regained some ground in early Asian trade on Wednesday, as investors weighed concerns over output cuts by key producers and attacks on shipping in the Red Sea against dimmed expectations of U.S. rate cuts. There may be some cautiousness as the Reserve Bank of India’s February 2024 bulletin showed that the net foreign direct investment (FDI) into India, inflows minus the outflows, declined sharply by 55.2 per cent to $9.69 billion in April-December 2023, from $21.63 billion in the corresponding period in 2022, mainly due to a rise in repatriation of equity capital.

The US markets ended lower on Tuesday with the Nasdaq showing the largest declines as chipmaker Nvidia stumbled ahead of its highly awaited earnings report. Asian markets are trading mixed on Wednesday tracking Wall Street losses.

Back home, Indian equity benchmarks continued their upward momentum for the sixth consecutive session on Tuesday, largely driven by gains in Banking, Realty and Financial Services stocks. The markets initially faced some downward pressure as the provisional data from the NSE showed that foreign institutional investors (FIIs) net sold shares worth Rs 754.59 crore on February 19. However, key gauges recovered from early losses and managed to trade in green for most part of the session, as traders got some support after Commerce and Industry Minister Piyush Goyal exuded confidence that the Reserve Bank of India (RBI) will cut interest rates as inflation is under control. The RBI has been maintaining the benchmark interest rate at an elevated level of 6.5 per cent since February 2023. Key gauges added gains in late afternoon deals, taking support from Union minister Hardeep Singh Puri's statement that infrastructure will be a vital component for India to become a developed country by 2047. He asserted that the country will be the third-largest construction market globally by next year. Highlighting the vitality of the construction industry for the Indian economy, he said the construction industry is among the fastest growing industries in the country. Meanwhile, government think tank NITI Aayog has pitched for tax reforms, mandatory saving plan, and housing plan for elderly in India, as the population of senior citizens is projected to reach 19.5 per cent of the country’s population by 2050. Finally, the BSE Sensex rose 349.24 points or 0.48% to 73,057.40 and the CNX Nifty was up by 74.70 points or 0.34% to 22,196.95.

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