Benchmarks to make positive start following global peers

Indian markets ended higher on Tuesday led by gains in financials, metal and auto stocks, following positive trends in Asian peers. Today, the start of session is likely to be positive tracking gains in global peers. Some support will come with Nasscom’s report that driving utilisation of data and artificial intelligence (AI) could play a crucial role in realising India’s 2025 vision of inclusive development and deliver over $500 billion in value to the economy. According to the industry body, this segment could account for 10 per cent of the country’s GDP by 2025. The report added that it would be even more impactful as India’s economy restarts after the Covid-19 lockdown. Traders may take note that the Reserve Bank unveiled the framework for setting up umbrella entities for operating pan-India retail payments systems and invited applications from eligible companies by February 26, 2021. However, rising coronavirus cases may impact the sentiments in the markets. India has recorded over 65,000 coronavirus cases in the past 24 hours, taking its total to 2,766,626. With 1,089 fatalities reported on Tuesday, the country's death toll surged to 53,014. Also, some cautiousness may come with Moody's Investors Service’s statement that US-India trade negotiations will continue to be challenging and are likely to get delayed due to the Covid-19 pandemic. Auto stocks will be in focus as international rating agency Fitch has forecasted over 20 percent decline in domestic automobile demand during this fiscal year as the industry faces several challenges and not just pandemic driven issues. Banking stocks will be in limelight with Care ratings’ report that banks’ credit growth is expected to remain slower in the near term as they are cherry picking their credit portfolios with caution. There will be some reaction in agriculture related stocks as the agriculture ministry said India's farm exports rose 23.24 percent in value terms to Rs 25,552.7 crore during March-June period amidst the COVID-19 pandemic.

The US markets ended mostly in green on Tuesday as trillions of dollars in stimulus aid from the Federal Reserve and Congress helped prop up an American economy gripped by recession. Asian markets are trading mostly higher on Wednesday following overnight gains on Wall Street.

aBack home, Indian equity benchmarks opened higher and built on the rally throughout the day to close near intraday highs on Tuesday, amid heavy buying in realty and banking stocks. Indian shares closed up for a second straight day, with Sensex and Nifty moved above their important psychological levels of 38,500 and 11,350 respectively. Market participants got comfort as government relaxed norms for Partial Credit Guarantee Scheme (PCGS) for purchase of bonds and commercial papers by public sector banks and extended its period by three months, with a view to provide additional liquidity to crisis-ridden NBFCs and housing finance companies (HFCs). Sentiments remained positive, amid report that Finance Minister Nirmala Sitharaman held a virtual bilateral meeting with United Arab Emirates (UAE) Minister of State for Financial Affairs Obaid Al Tayer and urged the Middle Eastern nation to participate in India's ambitious Rs 111 lakh crore National Infrastructure Pipeline. About 7,000 projects have been identified under the National Infrastructure Pipeline (NIP) with projected investment of Rs 111 lakh crore during 2020-25. Domestic markets staged a strong up move in final hour of trade, taking support from private report that consumer sentiment has started to get a little better, even though the COVID-19 pandemic has continued to worsen. It also said cautious living is emerging as the new theme, where consumers beginning to feel that it is time that they need to resume their activities albeit with a lot of caution. Traders overlooked State Bank of India's (SBI) research report Ecowrap stated that India’s Gross Domestic Product (GDP) is likely to contract by 16.5 percent in Q1 (April-June) of 2020-21, as the current Covid-19 pandemic is spreading at a much faster rate after the opening up of the economy. Meanwhile, the Government of India (GOI) is going to sell (re-issue) three dated securities for a notified amount of Rs 30,000 crore. Finally, the BSE Sensex gained 477.54 points or 1.26% to 38,528.32, while the CNX Nifty was up by 138.25 points or 1.23% to 11,385.35.