Indian indices likely to open in red on weak global cues

Indian markets ended at record levels on Monday led by robust buying in metal and IT stocks. Today, the start of session is likely to be negative tracking weakness in global peers coupled with concerns over rising coronavirus cases in the country. With 16,278 fresh Covid-19 cases, India's caseload now stands at 10,357,569. The country's death toll is nearing 150,000. With 1,947,011 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 921,938, Andhra Pradesh 883,210, Tamil Nadu 820,712, and Kerala 778,873. Also, trader will be cautious as Fitch Solutions expect the rupee to trade only slightly weaker over the near term from current levels. However, some support may come later in the day with Minister of State for Finance Anurag Thakur’s statement that the central government is making efforts to turn India into a manufacturing and export powerhouse. Thakur said manufacturing will now be broad-based in the country. Meanwhile, the Finance Ministry on Monday released the tenth instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall, taking the total amount provided so far under this window to Rs 60,000 crore. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. Aviation stocks  will be in focus with ICRA’s report that the domestic aviation industry's net losses may reduce to Rs 14,600 crore from an estimated a net loss of Rs 21,000 crore this fiscal, With around 57 percent growth expected in revenue in FY22 on the back of a likely higher passenger traffic.

The US markets ended lower on Monday as risk appetite ebbed amid upcoming runoff elections in Georgia and the persistent surge in coronavirus cases.  Asian markets are trading mixed on Tuesday amid uncertainty about Senate runoffs in Georgia, which could have a big impact on incoming US President Joe Biden's economic policies.

Back home, Indian equity benchmarks staged a sharp recovery from the day's low to end near the highest point of the day, and registered yet another record closing high level on Monday, tracking gains in index majors ONGC, TCS, HCL Technologies and Tech Mahindra. Sentiments got a boost after the Drugs Controller General of India (DCGI) granted restricted emergency use authorization for the Serum Institute of India (SII)’s Covishield and Bharat Biotech’s Covaxin vaccines against COVID-19. Also, Union Minister of State for Health and Family Welfare Ashwini Kumar Choubey stated that India will become corona-free. Some support also came in with government data showing that signalling an economic revival, goods and services tax (GST) collection touched a record high in December, posting growth of 11.6 per cent year-on-year (Y-o-Y) and surpassing the Rs 1-trillion mark for the third straight month. However, during the late morning session markets slipped as there was some cautiousness with the commerce ministry’s data showing that the country’s exports declined marginally by 0.8 percent to $26.89 billion in December 2020, compeered to  $27.11 billion December 2019 due to contraction in sectors like petroleum, leather and marine products. The trade deficit in December widened to $15.71 billion, as imports grew by 7.6 percent to $42.6 billion. However, markets soon regained and further strengthened, after India’s manufacturing sector continued to strengthen in December with companies stepping up production and input buying amid efforts to rebuild their inventories following pandemic-driven business closures earlier in 2020. Data released by analytics firm IHS Markit showed Purchasing Managers’ Index (PMI) for manufacturing sector picked up marginally in December to 56.4 from 56.3 a month ago. A figure above 50 indicates expansion, while sub-50 signals contraction. Finally, the BSE Sensex rose 307.82 points or 0.64% to 48,176.80, while the CNX Nifty was up by 114.40 points or 0.82% to 14,132.90.