Markets likely to get positive start on Friday

Indian markets ended nearly record highs on Thursday led by gains in heavyweights HDFC twins, RIL, and Bajaj Finance. Today, the domestic indices are likely to continue record hitting spree with positive start tracking overnight gains on Wall Street. Traders will be taking encouragement as the Reserve Bank of India will conduct the third auction of state developments loans (SDLs) aggregating Rs 10,000 crore under the Open Market Operations (OMO) on December 23. The RBI had decided to conduct OMOs in SDLs as a special case during the current financial year with an aim to improve liquidity and facilitate efficient pricing. Some support will come as Icra pegged the contraction in the economy at 7.8 per cent for 2020-21. Before the GDP numbers for Q2 were out, it had predicted the fall in the economy at 11 per cent. It said improving economic fundamentals, a bright outlook for the rabi season, and the visibility of vaccine availability are expected to strengthen demand. Also, as per a report, CBDT has said further adding to the recovery signals, advance tax payment by companies has shown a massive 49 per cent growth to Rs 1,09,506 crore in the third quarter this fiscal. Traders may take note of Finance minister Nirmala Sitharaman’s statement that strong decisions taken by the Modi government have ensured steady flow of foreign direct investment (FDI) into the country which is far greater than what comparable economies have attracted during the pandemic. However, there may be some cautiousness as India reported 26,762 fresh Covid-19 cases pushing the overall tally to 9,977,834, according to Worldometer. The death toll from the deadly infection jumped to 144,829. There will be some reaction in gas and infrastructure stocks with Petroleum Minister Dharmendra Pradhan’s statement that the government has planned a $60-billion investment for creating gas infrastructure in the country till 2024, and gas' share in the energy mix is expected to rise to 15 per cent by 2030.

The US markets ended higher on Thursday as investors grew more optimistic about a coronavirus stimulus bill, helping markets look past signs of economic strain brought on by the COVID-19 pandemic. Asian markets are trading mixed on Friday as the investor mood in the region shifted to broader caution about the economic outlook and as post-Brexit worries weighed.

Back home, Indian equity benchmarks ended at record closing highs yet again on Thursday, tracking gains in index majors HDFC, Bajaj Finance, HDFC Bank and Indusind Bank. Markets made slightly positive start, as traders took some support with Commerce and Industry Minister Piyush Goyal’s statement that the government is making efforts to deregulate the economy with an aim to attract greater investments from across the world. He said the government has opened up defence, manufacturing, mining, finance and capital market sectors. Buying further crept in as SBI Research scaled up its projections for the economy, projecting gross domestic product (GDP) to contract 7.4 per cent during the current financial year compared to its earlier forecast of a 10.9 per cent fall. Key indices added more gains in the late afternoon session, taking support from Former RBI Governor D Subbarao’s statement that while managing a crisis is extremely difficult and the Reserve Bank of India (RBI) had been successful in preserving the financial stability of the economy during the present coronavirus disease (covid-19) pandemic. Some respite also came as a study by the World Economic Forum showed that few economies in the world are ready for long-term prosperity through improved public services, green investments and digitization. The special edition of the WEF's Global Competitiveness Report, which examined how the recovery from the COVID-19 crisis can build productive, sustainable and inclusive economic systems, found that the countries with advanced digital economies, strong social safety nets and robust healthcare systems have managed the impact of the pandemic more effectively. Finally, the BSE Sensex rose 223.88 points or 0.48% to 46,890.34, while the CNX Nifty was up by 58.00 points or 0.42% to 13,740.70.