Markets to get positive start on Thursday

Indian markets ended higher on Wednesday led by gains in heavyweight Reliance Industries after it secured a $750 million investment in its retail arm. Today, the markets are likely to continue their winning streak with positive start following gains in Asian peers. Traders will be taking encouragement with the Union health ministry’s statement that the number of people recovered from Covid-19 has exceeded those with active infection by more than 48 lakh as the recovery rate surpassed 85% on Wednesday. Some support will come with the chairman of the Standing Committee on Statistics, ministry of statistics and programme implementation Pranob Sen stating that the government should continue with the stimulus to revive the economy for three years and it should not be one off. Some optimism will also come in with Union Minister VK Singh’s statement that highways and infrastructure can spur the country’s economic growth. Traders may take note of Principal Economic Adviser Sanjeev Sanyal’s statement that the government recognises the need for further stimulus at an appropriate time to perk up demand in the economy, hit by COVID-19. Meanwhile, there are expectations that the revamped Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) may at last release a GDP forecast for the fiscal, which the apex bank has refrained from giving since the outbreak of the pandemic. MSME stocks will be in focus as the RBI said the two per cent interest subvention scheme for micro, small and medium enterprises (MSMEs) on loans extended by co-operative banks has been extended till March 31 next year. There will be some reaction in pharma stocks with report that the initial response to the four schemes launched by the Department of Pharmaceuticals (DoP) for promoting domestic manufacturing of drugs, APIs/ KSMs and medical devices is quite encouraging.

The US markets ended sharply higher on Wednesday as investors regained optimism that at least a partial deal on more US fiscal stimulus may happen. Asian markets are trading mostly in green on Thursday tracking overnight gains on Wall Street.

Back home, extending their gaining streak into the fifth session in a row, Indian equity benchmarks ended over half a percent higher on Wednesday, led by buying in consumer durables, energy and auto stocks. Markets made a cautious start, amid reports that workers in India are facing increased burnout due to lack of separation between work and personal life as well as concerns of contracting COVID-19. Close to one-third of workers in India cited increased rates of burnout over the past six months with the lack of separation between work duties and personal obligations as negatively impacting their well-being. However, key gauges soon gained ground and traded in fine fettle throughout the day, as traders found support with report that companies garnered more than Rs 1 lakh crore from the capital markets in August, a surge of 64 percent from the preceding month, with private placement of debt instruments emerging as the most preferred route for financing business needs. The funds have been mopped-up mainly for business expansion plans, loan repayments and working capital requirements. Domestic indices held on to their firm undertone in late afternoon trading, taking support from Fitch Ratings’ report that IT services sector is likely to resume high single-digit revenue growth in 2021-2022 on the back of higher demand for digital transformation after a flattish 2020. However, further up-move got restricted as traders awaited corporate earnings from heavyweights and the outcome of a policy review by the RBI due in the coming days. The Reserve Bank of India's Monetary Policy Committee will to begin a three-day review later in the day. The central bank is widely expected to hold key interest rates at existing levels in the upcoming policy statement, due on October 9, in a bid to tackle high inflation. Tata Consultancy Services (TCS) - the country's largest IT company - will kick of the earnings season by reporting its financial results for the July-September period. Finally, the BSE Sensex rose 304.38 points or 0.77% to 39,878.95, while the CNX Nifty was up by 76.45 points or 0.66% to 11,738.85.