Local indices likely to make positive start on Thursday

Indian markets ended higher on Wednesday after a rally in IT stocks overshadowed weak global investors sentiment stemming from the rapid spread of a new strain of the coronavirus in the UK. Today, the start of session is likely to be positive tracking gains in global peers. Traders will be taking encouragement with Union Minister of State for Finance and Corporate Affairs Anurag Thakur’s statement that India will have a strong economic revival thanks to its well-planned easing of lockdown. He also defended the contentious farm sector reforms, saying the Narendra Modi government had the courage to do what others could not. Traders may take note of report that Covaxin, a COVID-19 vaccine being developed by Bharat Biotech, showed long-term antibody and T- cell (immune) memory responses three months after the shot in phase 1 volunteers and tolerable safety outcomes in Phase 2 study, the city-based company has said, suggesting the antibodies may persist for six to 12 months. Meanwhile, the Union Cabinet has approved changes to the guidelines for providing Direct to Home (DTH) services to bring it in line with the existing policy that allows 100 per cent FDI in the DTH broadcasting services sector. Banking stocks will be in focus as the Reserve Bank of India (RBI) governor Shaktikanta Das asked banks to take proactive measures to strengthen their resilience and lending capacity by raising capital. There will be some reaction in steel sector stocks with report that recovering economy, sprouting demand and improving prices raise hopes for the country's battered steel sector as it steps into the New Year after pandemic-induced disruptions turned 2020 into a disaster for the industry. Besides, Mrs Bectors Food Specialities shares will debut on the bourses today. The 541-crore public issue is the most subscribe IPO of 2020 so far with investors bidding for the issue 197.38 times where Non-Institutional Investors subscribed their portion a massive 620.85 times.

The US markets closed mostly higher on Wednesday as an expected stimulus deal and falling jobless claims prompted investors to put their money into sectors most likely to benefit from the economy re-opening when it recovers from the global health crisis. Asian markets are trading mostly in green on Thursday ahead of the Christmas break, as global investors cheered a potential Brexit deal and economic recovery prospects, largely ignoring US President Donald Trump’s threat to veto a long-awaited COVID aid package.

Back home, Indian equity benchmarks ended higher for the second straight day on Wednesday, tracking gains in Hindustan Unilever, Infosys and Mahindra & Mahindra amid a positive trend in global markets. Key gauges made cautious start, amid concerns about a new faster-spreading variant of the coronavirus. But, the benchmarks soon gained traction and traded in fine fettle, as investors took some solace from a private report that India is likely to approve Oxford/AstraZeneca’s coronavirus vaccine for emergency use by next week after its local manufacturer submitted additional data sought by authorities. Traders also took encouragement with PHD Chamber of Commerce and Industry’s EBM Index showing that the continuous improvement in the key economic and business indicators signals that the worst is behind us and expectations of positive GDP growth at 0.1 per cent to 2 per cent in Q3 and 2 per cent to 4 per cent in Q4 FY 2020-21 are becoming strong with a higher growth trajectory in FY 2021-22 at 7.7 per cent. Domestic indices extended gains in late afternoon deals, taking support from rating agency ICRA’s report that the domestic securitization volumes of retail pools originated by non-banking financial companies (NBFC) and housing finance companies (HFC)) are likely to witness a healthy bounce back in FY2022, after witnessing a sharp contraction in the current fiscal so far. Some respite also came with Financial Services Secretary Debasish Panda’s statement that the government plans to set up a Development Finance Institution (DFI) in the next three to four months, with a view to mobilize Rs 111 lakh crore required for funding of the ambitious national infrastructure pipeline. Meanwhile, Industry body CII said it has demanded higher allocation of fund for food processing schemes and tax incentives for exports of agriculture and food items. In a pre-Budget meeting with senior finance ministry officials, CII highlighted the need to find ways for tapping export markets for wheat. Finally, the BSE Sensex rose 437.49 points or 0.95% to 46,444.18, while the CNX Nifty was up by 134.80 points or 1.00% to 13,601.10.