Benchmarks likely to open in green terrain on Thursday

Indian markets ended flat with positive bias on Wednesday tracking mixed cues from the global markets amid geopolitical uncertainty. Today, the start is likely to be in green following positive cues from global markets. Traders will be getting encouragement as a working group of the Commerce and Industry Ministry came out with a blueprint suggesting a host of long and short-term measures to increase the size of India's economy to $5 trillion by 2025. It added that India’s potential to achieve a $5 trillion GDP by 2024-25 is within the realm of possibility. Some support may also come with report that in a bid to improve the ease of doing business, the Reserve Bank of India (RBI) announced a new framework for external commercial borrowings (ECB) and rupee denominated bonds. Indian borrowers can now raise funds from offshore markets for at least three years without any ceiling on the amount. Traders may take note of a private report that with softer retail and wholesale price-based inflation, RBI is likely to change its policy stance to neutral from calibrated tightening in the February policy. Meanwhile, markets regulator SEBI has decided to allow mutual funds to write call options subject to certain conditions. Generally, call options refer to an agreement that gives a buyer the right to purchase an asset at a specified price within a particular time period. Besides, facing sustained pressure from start-ups and venture capital funds over the so-called angel tax, the government has relaxed norms for seeking exemptions from the controversial levy. The government scrapped the existing mechanism to approve start-ups applying for tax breaks under Section 56(2)(viib) of the Income Tax Act. There will be some buzz in the banking sector stocks with report that the government approved a capital infusion of Rs 6,000 crore in state-owned Exim Bank to expand its business. The equity will be infused in two tranches of Rs 4,500 crore in 2018-19 and Rs 1,500 crore in 2019-20 respectively. Traders will be eyeing some important earnings announcement including that of Reliance Industries and Hindustan Unilever.

The US markets ended higher for a second consecutive session on Wednesday, lifted by bank stocks as investors parsed the latest batch of corporate earnings. Asian markets were trading mostly in green on Thursday as upbeat bank earnings bolstered Wall Street, while an anticlimactic end to the latest chapter in the Brexit saga gave sterling a moment’s peace.

Back home, volatility led the key Indian equity benchmarks to end the Wednesday’s trading session flat with minor gains.  The key indices made a positive start of day, as India's exports grew by a 0.34 percent to $27.93 billion in December, continuing growth momentum for the third straight month. The trade deficit narrowed to ten-month low of $13.08 billion in December 2018 as against $14.20 billion in the same month previous year. The overall trade deficit for April- December 2018-19 is estimated at $82.72 billion as compared to $69.63 billion during April- December 2017-18. Traders were optimistic with the Reserve Bank of India’s (RBI) statement that it will inject Rs 10,000 crore into the system through purchase of government securities on January 17 to increase liquidity. The purchase will be made through open market operations (OMOs). The RBI plans to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The central bank has so far injected Rs 20,000 through OMOs in January. Meanwhile, the government has unveiled its much-awaited national air cargo policy, with an aim to make India among the top five air freight markets by 2025 and creating air transport shipment hubs at all major airports over the next six years. Trade remained positive for the most part of the session, tracking firm Asian markets. The market participants were seen taking support with private report stating that benign headline inflation to provide a dovish tilt to monetary policy committee (MPC). Softer December CPI and WPI prints of 2.2 per cent and 3.8 per cent, respectively reaffirm its belief that the MPC will adopt a more dovish tone in the February meeting and change its stance to neutral from calibrated tightening. The street also got some relief after the Fertiliser Ministry sought an additional Rs 23,000 crore from the Finance counterpart, in order to meet the subsidy requirement for the Q4 (January-March) of 2018-19. The fertiliser subsidy arrear touched about Rs 23,283 crore till December 2018, and some of it would be cleared with available funds and the remaining on receipt of additional funds. However, last leg volatility pulled markets near neutral lines to end flat. Sentiments also got hit, with ICRA’s latest report indicating that a recent policy change favouring advanced degree holders for visas in US will lead to a hit on IT companies' profitability as the number of H1-B visas approved gets reduced. Finally, the BSE Sensex gained 2.96 points or 0.01% to 36,321.29, while the CNX Nifty was up by 3.50 points or 0.03% to 10,890.30.