Benchmarks likely to open in red amid revived coronavirus fears

Indian markets ended at a record close on Wednesday led by gains in financials and auto stocks. Today, the start of session is likely to be pessimistic amid revived coronavirus fears and sell-off in global markets. India has reported merely 45,439 fresh Covid-19 cases in the past 24 hours. The total caseload now stands at 8,958,143. The country's death toll has mounted to 131,618. Delhi recorded 7,486 fresh coronavirus cases on Wednesday, taking the infection tally in the city to 500,000, while 131 new fatalities, the highest single-day death count till date, pushed the toll to 7,943. Traders will also be concerned with a private report that India is among the few major nations among emerging and developing economies with higher inflation in October 2020 compared to December 2019 (pre-Covid levels). Also, among these nations, the rise in core inflation is the highest in India. however, some support may come later in the day with another private report that overseas investors have pumped in $6.3 billion in Indian equity markets in three months ended September on attractive valuations, opening-up of the economy and resumption in business activities. Meanwhile, the Revenue Department has reviewed the progress of Vivad se Vishwas Scheme, a direct tax legacy dispute resolution scheme launched by the government in March this year. The finance ministry revealed that till date Rs 72,480 crore of tax has been paid by CPSUs and taxpayers against the disputed demand under the scheme. Banking and financial counters will be in limelight as the Supreme Court is scheduled to resume hearing in the interest waiver case later today. Aviation stocks will be in focus with data released by Directorate General of Civil Aviation showing that Indian airlines carried 5.27 million passengers in October, down 57% year-on-year, as a relentless rise in covid cases has kept appetite for travel in. Though, domestic air traffic jumped by 33.67 percent month-on-month in October, continuing on a gradual but steady rebound after flights resumed in May after the lockdown.

The US markets ended in red on Wednesday as investors weighed surging COVID-19 infections and mounting shutdowns against encouraging vaccine developments. Asian markets are trading mostly lower on Thursday followed Wall Street's sharp selloff as concerns about rising coronavirus infections and new shutdowns in major US cities hosed down earlier investor enthusiasm about COVID-19 vaccine developments.

Back home, Indian equity benchmarks recovered from initial losses to register new record closing highs in a volatile session on Wednesday, amid largely positive cues from Asian markets and persistent foreign fund inflows. With this, local gauges extended their rise for the third straight session. After making cautious start, markets traded with minor losses, as investors remain concerned about rising cases of coronavirus worldwide. Selling further crept in amid report that the committee, comprising senior central and state tax officers, is looking to further tighten the Goods and Services Tax (GST) registration process and work out other legal measures including necessary law amendment required in the GST Act to curb the menace of fake invoicing. Also, the provisions related to deemed registration under GST law may be tightened to prevent the misuse of such provisions by fake dealers and the provisions related to the suspension of registration may also be streamlined to make the procedure of suspension and cancellation of registration more efficient and faster, so that such fraud operators can be prevented in time from continuing to pass on fake credit down the chain. However, in late hour of trade, domestic markets erased all the losses to settle in green terrain, as private report upgraded its India GDP forecast to a contraction of 10.3 per cent in FY21, as against its earlier estimate of a negative growth of 14.8 per cent. The US-based firm said developments on the vaccine front -- where two candidates have posted satisfactory progress -- will be very helpful in the recovery. Market participants also took a note of Prime Minister Narendra Modi’s statement that his government will leave no stone unturned to make India a preferred global investment destination as he pitched for foreign investment to modernise urban centres, offering a business friendly climate and a huge market. As the nation rebuilds post pandemic, he said COVID-19 has given governments the chance to accelerate the 'process of making cities more liveable for people. Finally, the BSE Sensex rose 227.34 points or 0.52% to 44,180.05, while the CNX Nifty was up by 64.05 points or 0.50% to 12,938.25.