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Indian markets remained under pressure for a second straight day on Wednesday as risk-off sentiment, spread across global markets, hit domestic shores as well. Today, markets are likely to open in green after two-days of consolidation. Sentiments will get a boost as India Ratings and Research upped India’s GDP growth estimate for current fiscal to 6.7 per cent, from 6.2 per cent, citing resilient economy, sustained government capex and prospect of a new private corporate capex cycle. Some optimism will also come as Fitch Ratings said the economic growth in Asia Pacific will remain strong in 2024 and GDP is expected to grow by about 5 per cent in India and a host of emerging market countries. In its report titled 'APAC Cross-Sector Outlook 2024', Fitch said the outlooks for the banking sectors in India and Indonesia, as well as APAC emerging markets as a whole, move to improving in 2024, partly reflecting the robust economic backdrop. However, gains in the markets are likely to remain capped tracking persistent weakness across global markets. Foreign fund outflows also likely to dent sentiments. Foreign institutional investors (FIIs) sold shares worth Rs 666.34 crore on January 3, provisional data from the NSE showed. Auto stocks will be in focus as the Union Finance Ministry sanctioned an additional Rs 1,500 crore for the second phase of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME-II) programme, addressing fears that funds could run out before the scheme ends in March 2024 due to robust electric vehicle (EV) sales. A proposal to increase the outlay for FAME-II from Rs 10,000 crore to Rs 11,500 crore was approved by the department of expenditure (DoE) on January 2. There will be some reaction oil & gas industry stocks amid a private report that oil demand in India is expected to remain positive this year despite worries over an industrial slowdown in China affecting related economies, and a cut in global crude production. Sugar industry stocks will be in limelight as the government notified exports of 8,606 tonnes of raw cane sugar under tariff-rate quota (TRQ) to the US for 2024. The directorate general of foreign trade (DGFT) in a public notice said that this quantity has been notified under the TRQ scheme from October 1, 2023-September 30, 2024. There will be some buzz in metal stocks as Icra said global prices of metals, including aluminium, are unlikely to improve considerably in the near term due to uncertainties in the global macroeconomic environment.

The US markets ended lower on Wednesday after minutes of the US Federal Reserve's last meeting showed uncertainty over the rate cut trajectory. Asian markets are trading mostly in red on Thursday led by Japan as the country resumed trading after an extended New Year’s holiday during which it witnessed an earthquake and a collision at Tokyo’s Haneda airport involving Japan Airlines.

Back home, Indian equity benchmarks ended lower for the second straight day with losses of over half percent on Wednesday due to sharp selloff in Metal, IT and TECK counters amid weak global trends. Traders also awaited Q3 earnings from India Inc, which kicks off next week. Markets made a negative start and traded with a negative bias throughout the day as traders got anxious with the HSBC India Manufacturing PMI survey, conducted by S&P Global, showing India’s manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, was recorded at an 18-month low of 54.9 in December as against 56.0 in November. Despite the fall, the HSBC India Manufacturing PMI was indicative of a marked improvement in the health of the sector. It also showed the sector still expanding strongly in December despite a loss of growth momentum. Some cautiousness also prevailed in the markets with ICRA’s report stating that at the first weekly auction of the last quarter of 2023-24, the states saw their interest burden sharply rising to cross the 7.7 percentage mark on Tuesday, leading to the spread between the cut-off of 10-year state bonds and the G-sec yield crossing the 50 basis points mark for the first time in two years. Sentiments remained down-beat in late afternoon deals, amid crude oil price fluctuations as tensions are on a rise with Iran's deployment of a warship in the Red Sea in response to the US Navy destroying three Houthi boats. Traders overlooked a private report projecting a much lower current account deficit which is likely to print at 1 per cent for this fiscal, leaving the balance of payment surplus at $39 billion, as the country's external balances are stronger than expected on the back of strong inflows. Traders also paid no heed towards a report by economic think tank GTRI stating that countries ranging from large economies like Europe, and the UK to smaller ones, including Oman and Peru, want to have a free trade agreement with India due to the country's large and rapidly growing market. Finally, the BSE Sensex fell 535.88 points or 0.75% to 71,356.60 and the CNX Nifty was down by 148.45 points or 0.69% to 21,517.35.

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