Markets likely to open in green on Thursday

Indian markets ended in the red on Wednesday as losses in financials, IT, and pharma stocks overpowered gains in auto, media, and PSU Bank space. Today, the start of session is likely to be slightly in green amid mixed global cues. Traders will be taking encouragement as Global forecasting firm Oxford Economics revised India's economic growth projection for 2021 to 10.2 per cent from the earlier 8.8 per cent, citing receding COVID-19 risks and the shift in the monetary policy outlook. It further said the Budget 2021-22 will create positive externalities for the private sector, and forecast slower fiscal consolidation in FY22 than the government projections. Traders may take note of report that the Union Cabinet has approved signing of a comprehensive economic cooperation agreement, a kind of a free trade pact, between India and Mauritius which is aimed at liberalising norms to boost two-way commerce. Meanwhile, a private report stated that India has emerged as Asia's biggest destination for financial technology (fintech) deals, leaving behind China in the quarter ended June 2020. However, there may be some cautiousness as the government issued new guidelines for international arrivals amid the spread of mutant variants of coronavirus in many countries. The new Standard Operating Procedures (SOPs) will come into effect from 23.59 hours on February 22 till further orders. Telecom stocks will be in focus as the Union Cabinet approved a production-linked incentive (PLI) scheme worth Rs 12,195 crore for telecom equipment manufacturing. There will be some reaction in pharma stocks as India Ratings and Research (Ind-Ra) does not expect Indian pharmaceutical companies to sustain the healthy operating margins reported during 3Q FY21 and 9M FY21. It said the India formulations business grew year-on-year (y-o-y) during 3Q FY21 and 9M FY21 while growth across other segments was lower both on quarter-on-quarter (q-o-q) and y-o-y basis.

The US markets ended mostly lower on Wednesday as losses by technology and industrial companies offset gains in other parts of the market. Asian markets are trading mixed on Thursday as lingering pandemic concerns pushed against stronger economic data, and with little firm direction from Wall Street.

Back home, falling for the second straight session, Indian equity benchmarks ended over half a percent lower each on Wednesday mainly dragged by the healthcare, IT, finance and banking. The benchmarks made gap-down opening, as traders were concerned as India registered 11,795 fresh Covid-19 cases of the coronavirus disease (Covid-19). Active cases in India stand at 137,866, while the caseload tally has risen to 10,937,106. The country continues to be second-most-affected globally, and ranks 17th among worst-hit nations by active cases. Some cautiousness also came as Maharashtra chief minister Uddhav Thackeray warned that if Covid-related norms are not followed, the state government will be forced to reimpose a lockdown. Markets managed to cut most of their losses in late morning session, taking support from ICRA Ratings’ report that after two consecutive quarters of contraction, India's Gross domestic product (GDP) is set to revert to the growth territory in the October-December 2020 period (Q3FY21) compared to the year-ago period. It also said private consumption and government spending will help the economy post a turnaround during the December quarter and the GDP will grow 0.7 percent.  But, key indices failed to hold recovery and fell sharply in late afternoon deals, as sentiments remained down-beat with Rating agency Crisil expects stressed assets of non-banking financial companies (NBFCs) to touch Rs 1.5-1.8 lakh crore or 6-7.5% of the assets under management (AUM) by the end of the current financial year.  However, reported gross non-performing assets would be limited due to the one-time Covid-19 restructuring window and the micro, small and medium enterprises (MSMEs) recast scheme offered by the Reserve Bank of India (RBI). Unlike previous crises, the pandemic has impacted almost all NBFC asset segments. Finally, the BSE Sensex fell 400.34 points or 0.77% to 51,703.83, while the CNX Nifty was down by 104.55 points or 0.68% to 15,208.90.