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Indian markets ended marginally higher on Thursday to extend gains for a third day running. Today, markets are likely to get slightly positive start tracking overnight gains on Wall Street. Some support will come with a data showing that India's net direct tax collection increased 19 per cent on an annual basis to Rs 14.70 lakh crore till January 11. The data also revealed that the tax collection has reached 81 per cent of full-year target. The government has budgeted to collect Rs 18.23 lakh crore from direct taxes (personal income tax and corporate tax), 9.75 per cent higher than Rs 16.61 lakh crore mopped up last fiscal. Traders may take note of Finance Minister Nirmala Sitharaman’s statement that the much-awaited direct listing of stocks at the International Financial Services Centre (IFSC) in GIFT City would happen soon to enable Indian companies to access global funds easily. However, investors likely to remain on sidelines ahead of India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out later in the day for more directional cues. There are expectations that India's headline retail inflation rate likely rose to a four-month high in December, edging closer to the upper-bound of the Reserve Bank of India's (RBI) tolerance range of 2-6 percent. Foreign fund outflows likely to dent sentiments. Provisional data from the NSE showed that foreign institutional investors (FIIs) sold shares worth Rs 865 crore on January 11. Some cautiousness may come as India’s outward foreign direct investment (FDI) commitments fell sharply to $2.25 billion in December 2023, compared to over $4.12 billion in December 2022. Sequentially, they were also down from $4.0 billion in November 2023, according to Reserve Bank of India (RBI) data. IT stocks will be in focus after Infosys and TCS Q3 numbers. Infosys cut its revenue growth guidance for the third straight quarter, after reporting a 7.3 per cent dip in Q3 net profit. TCS reported a 2 per cent rise in net profit. Meanwhile, investors will keep eye on Q3 earnings of HCL Technologies, Wipro, HDFC Life Insurance, Anand Rathi Wealth, Just Dial, JTL Industries, Tata Metaliks, Den Networks.

The US markets ended mostly higher on Thursday after the CPI number came slightly hotter than expected. Asian markets are trading mixed on Friday as investors awaited a slew of economic data out of China, including inflation and trade numbers for December.

Back home, Indian equity benchmarks ended with marginal gains in the volatile session on Thursday as investors looked ahead to key economic indicators like retail inflation and factory production for directional cues. Markets made a positive start and stayed within a narrow range for most part of the trading session as traders took support with Finance Minister Nirmala Sitharaman’s statement that India will become the third largest economy by 2027-28, with a GDP of over $5 trillion. Some optimism also came with PHDCCI report stating that India's economy is likely to surpass $4 trillion in 2024-25 and further escalate to $5 trillion by 2026-27. The industry chamber also expects the RBI to cut the repo rate by 100 basis points in a calibrated manner by the end of 2024. However, markets erased initial gains in late afternoon deals, as provisional data from the NSE showed that foreign institutional investors (FIIs) sold shares worth Rs 1,721.35 crore on January 10. Some concerns also came with the central bank Governor Shaktikanta Das’ statement that Indian financial institutions must guard against relying on algorithms and artificial intelligence to assess customers for loans. Das said Model based, algorithm lending can lead to a potential crisis. But, markets staged recovery and managed to post marginal gains, as some optimism remained among traders as State Bank of India chairman Dinesh Kumar Khara termed the 7.3 per cent growth estimate for the country for FY24 as a very positive development. Traders took note of Foreign Secretary Vinay Kwatra’s statement that India and the United Arab Emirates have signed a deal to explore the establishment of grid connectivity between the two countries. He said one of the pacts is on renewable energy, which also includes green hydrogen and solar. Finally, the BSE Sensex rose 63.47 points or 0.09% to 71,721.18 and the CNX Nifty was up by 28.50 points or 0.13% to 21,647.20.

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