Markets likely to get negative start amid weak global cues

Indian markets ended over half a percent lower on Thursday, extending losses for the third straight session dragged mainly by banking, financial and auto stocks. Today, the markets are likely to make negative start of session amid weakness in global peers. Traders will be concerned with report that India registered 12,643 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 10,962,189. The country continues to be second-most-affected globally, and ranks 17th among worst-hit nations by active cases. Also, there will be some cautiousness as the union ministries of health and civil aviation have released new guidelines for arriving international passengers due to the increased transmissibility of Brazil, South Africa, and UK variants of COVID-19. As per the new rules, all passengers traveling to India must get an RT-PCR test conducted within 72 hours of their flight departure time and the negative report has to be uploaded before boarding. However, some support may come later in the day with report that foreign portfolio investors (FPIs) have pumped in a whopping $33.8 billion into domestic equities and debt till February 15 this fiscal year -- the highest since FY15 when it was nearly $46 billion --taking their net outstanding investments to a record $592.5 billion. Meanwhile, Finance Minister Nirmala Sitharaman said India's inflation target band of 2%-6% is up for review as the five-year term for the current monetary policy framework draws to a close. Telecom sector stocks will be in focus with data released by sector regulator Trai showing that telecom subscriber base in the country fell marginally to 1,173 million in December 2020 with Vodafone Idea and state-run telecom firms BSNL and MTNL losing the bulk of their customers. There will be some reaction in aviation industry stocks with the monthly traffic data released by the aviation regulator, DGCA showing that India's domestic air passenger traffic declined around 40 per cent to 7.7 million in January 2021 over the year-ago period as the pandemic continues to hit air travel demand. IT industry stocks will be in limelight with a private report that the Indian information technology (IT) industry is expected to touch $300-350 billion in terms of revenue over the next five years.

The US markets settled in red on Thursday as more discouraging data on jobless claims and higher bond yields gave investors little reason to keep pushing the market higher. Asian markets are trading lower on Friday following overnight declines for the major indexes on Wall Street.

Back home, Indian equity benchmarks ended in red for third straight day, tracking losses in index heavyweights Bajaj Finance, Kotak Mahindra Bank, Mahindra & Mahindra and Nestle amid a weak trend in global markets. That apart, expiry of the weekly F&O contracts also added to the volatility. Markets made flat-to-positive start, 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. Sentiments remained positive with S&P Global Ratings’ report stated that India will be one of the fastest growing emerging market economies with a 10 percent growth in FY22, and future sovereign rating action would hinge on lowering fiscal deficit and sustaining debt burden. However, key indices erased gains to turn negative in late morning deals, 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. Market participants paid no heed towards with commerce and Industry Minister Piyush Goyal’s statement that he will engage with the new United States Trade Representative (USTR) for a fresh trade package as both the countries would have to look afresh at different ideas. 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. Finally, the BSE Sensex fell 379.14 points or 0.73% to 51,324.69, while the CNX Nifty was down by 89.95 points or 0.59% to 15,118.95.