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Indian markets ended lower for the third straight day on Thursday with bank and IT stocks coming under selling pressure amid weak global cues. Today, markets are likely to open in green, after three-session of profit booking, following firm cues from global markets. Traders will be taking encouragement as Reserve Bank of India Governor Shaktikanta Das said slowing global growth is reason for concern, a cause of worry but India is better placed to deal with various geopolitical challenges. He said the country's monetary policy must remain actively disinflationary despite the recent sharp fall in core inflation. Some support will come with a private report that Covid-19 cases are seeing a downward trend in India, with active cases falling to their lowest since December 21, 2023. The country recorded 2,439 active cases on January 18, 2024, the lowest national tally since the 2,669 cases recorded a month ago. Traders may take note of report that the Reserve Bank of India in its monthly bulletin said that India must aim to sustain the current growth momentum and secure a real GDP growth of at least 7% next fiscal year in an environment of macroeconomic stability. However, foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) sold shares worth Rs 9,901.56 crore on January 18, provisional data from the NSE showed. There may be some cautiousness as rating agency ICRA projected the GDP growth rate to slow down to below 6 per cent in the December quarter, mainly account of sharp fall in kharif crop output, and weak progress in rabi sowing for some crops. India had registered a Gross Domestic Product (GDP) growth rate of 7.6 per cent in the July to September period. There will be some reaction in Jewellery industry stocks with report that the Gem & Jewellery Export Promotion Council (GJEPC) has requested the Union Government to consider the introduction of the safe harbour rule for the sale of rough diamonds through Special Notified Zones (SNZs). IT stocks will be in focus tracking an overnight tech-rally in the US. Meanwhile, Q3 earnings of Reliance Industries, Hindustan Unilever, UltraTech Cement and Paytm will remain on the radar.

The US markets ended higher on Thursday on speculation the Federal Reserve will be in no rush to cut interest rates as the economy shows signs of resilience. Asian markets are trading mostly in green on Friday with Nikkei up more than 1 percent as investors assessed the country’s December inflation numbers.

Back home, extending previous session’s bloodbath, Indian equity benchmarks faced lackluster trade for yet another day on Thursday, with both Sensex and Nifty ending lower by half a percent each. After a gap down opening, markets remained lower for the whole trading session, amid signs that global central banks including the Federal Reserve and the European Central Bank will not rush to lower interest rates as previously anticipated. Traders remained cautious as external affairs minister S Jaishankar said that Houthi attack in Red Sea will hit India’s energy and economy. He stressed that the issue should be speedily addressed. A weak trade continued over the Dalal Street in afternoon deals, on the back of selling at Consumer Durables, Utilities and Power counters. The weekly F&O expiry added some volatility in the markets. Foreign fund outflows also dented sentiments. Provisional data from the NSE showed that foreign institutional investors (FIIs) sold shares worth Rs 10,578.13 crore on January 17. Traders overlooked RBI Governor Shaktikanta Das’ statement that consumer price index-based inflation, the main yardstick for the Reserve Bank of India’s policy making, is likely to average 4.5 per cent in the next financial year and gross domestic product (GDP) growth is likely to stay above 7 per cent. Finally, the BSE Sensex fell 313.90 points or 0.44% to 71,186.86 and the CNX Nifty was down by 109.70 points or 0.51% to 21,462.25.

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