Markets to open in red on Friday

Indian markets ended higher on Thursday, snapping 2 days of losses, mainly led by a rise in heavyweight Reliance Industries. Today, the markets are likely to open in red following mixed global cues. Investors will track key macroeconomic data -- the industrial production data for December and CPI inflation data for January. However, some support will come as the government approved applications from several medical devices manufacturers under the Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing. Traders may take note of Commerce and Industry Minister Piyush Goyal’s statement that the government has constituted a committee comprising members from public and private sectors to look into issues like promoting localisation and boosting manufacturing. Meanwhile, the government sought Parliament's approval for gross additional expenditure of Rs 6.28 lakh crore for 2020-21 as part of the second and final batch of supplementary demands for grants. The proposals involve net cash outgo of Rs 4.13 lakh crore while the remaining amount will be matched by savings of ministries or enhanced receipts. There will be some buzz in sugar sector stocks with trade body All India Sugar Trade Association’s (AISTA) statement that India's sugar exports may drop over 24 per cent to around 4.3 million tonnes in the current marketing season 2020-21, due to logistics constrains and less chances of shipments to Iran. Banking stocks will be in focus as Moody's Investors Service said India's economic recovery reduces the risk of a sharp deterioration in public sector banks' asset quality, but the capital would remain insufficient to support credit growth and absorb unexpected shocks. There will be some reaction in jewellery industry stocks with data of the Gem Jewellery Export Promotion Council (GJEPC) showing that gems and jewellery exports dipped 7.8 percent in January to $2.7 billion as against $2.9 billion a year ago.

The US markets ended mostly higher on Thursday with investors betting on more fiscal stimulus to ride out a coronavirus-driven recession as data showed a stalling recovery in the labor market. In Asian markets, only Nikkei is trading lower on Friday with major markets in Asia remain closed.

Back home, Indian equity benchmarks snapped their 2-day losing streak and ended higher in a lacklustre trade on Thursday amid stock-specific bets by investors. Markets made negative start as traders got anxious with Fitch’s statement that India’s medium-term growth outlook will assume a more critical role in sovereign assessment due to higher deficits and a slower consolidation path. Also, India recorded 12,760 fresh Covid-19 cases of the coronavirus disease (Covid-19). However, benchmark indices soon turned positive and traded in a narrow range on the back of heightened volatility owing to weekly expiry of index derivative contract. Traders also took note of SBI Research revised its contraction forecast for the current fiscal year to 7 per cent. The agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers. Markets extended gains in last hour of trading session, taking support from Industry body the Confederation of Indian Industry (CII) stating that steps taken by the government is helping the country's exports to record positive growth and the trend is expected to continue. Sentiments remained positive with Engineering Export Promotion Council of India stating the country's engineering exports have increased by 18.69 per cent in January this year and demand for such products in the international markets is expected to be steady in the remaining two months of the current fiscal. Some support also came with private report stated that the job market continues to improve sequentially across the country and job postings in some industries have improved, with some doing even better than the pre-Covid levels, led by IT, agro-based sectors. Finally, the BSE Sensex rose 222.13 points or 0.43% to 51,531.52, while the CNX Nifty was up by 66.80 points or 0.44% to 15,173.30.