Markets to open in green on Wednesday

Indian markets ended flat on Tuesday as gains in metal and energy stocks were capped by losses in banking and financial space like heavyweights Kotak Bank and HDFC twins. Today, the start of session is likely to be positive tracking overnight gains on Wall Street. Traders will be taking encouragement with a private report that India's GDP may turn positive at 1.3 percent in the third quarter of 2020-21, having witnessed contraction in the previous two quarters due to the coronavirus pandemic, as the number of cases is falling and public spending has started rising. Some support will come as Amitabh Kant, CEO of government policy think tank NITI Aayog, said the government was in the advanced stage of finalising the Remission of Duties and Taxes on Exported Products (RoDTEP) rates for all products. Traders may take note of report that India's count of active cases has dropped to 148,579. On Tuesday, the country registered 13,074 fresh Covid-19 cases, taking its the caseload tally to 11,028,937. Meanwhile, The National Stock Exchange (NSE) has announced changes in index maintenance guidelines, criteria and methodology. From March 31, there will be changes to revision in the index reconstitution date, stock capping, quarterly rebalancing of shares and investible weight factors, and calculation of Price to Earnings (P/E) ratio for indices. Besides, Tata Consumer Products will replace Gail India in the benchmark Nifty 50 index. The change will take effect on March 31. Telecom stocks will be in focus as the sector regulator may consider lowering the minimum price for 5G spectrum if the government directs it to do so because of concerns that the pricing set for the airwaves could hurt the rollout of the latest wireless technology. There will be some buzz in steel sector stocks with report that the commerce ministry's investigation arm DGTR has initiated a probe to review the need for continuing imposition of anti-dumping duty on certain types of steel products imported from China following complaints from domestic industry. Media, entertainment sector stocks will be in focus with ratings agency CRISIL’s report that Indian media and entertainment (M&E) sector is expected to witness a strong 27 percent growth in revenue to around Rs 1.37 lakh crore in 2021-22, after contracting 26 percent this fiscal. There will be some reaction in IT sector stocks with a private report that India's IT sector is experiencing a sequential growth in hiring since the lockdown in 2020, witnessing 39 per cent growth in job postings in January compared to the previous month.

The US markets ended mostly higher on Tuesday after Federal Reserve Chairman Jerome Powell signaled that the central bank was nowhere close to pulling back on its support for the pandemic-damaged US economy even as he voiced expectations for a return to more normal, improved activity later this year. Asian markets are trading mixed on Wednesday on concerns about rising interest rates and rich equity valuations and following a downdraft in US and European overnight trading.

Back home, Indian equity benchmarks erased most of their initial gains and closed flat with a positive bias on Tuesday amid high volatility and tepid cues from global markets. The benchmarks had a gap-up opening, with report that a day after surging past the 150,000-mark, India's count of active cases has dropped to 148,882. On Monday, the country registered 10,792 fresh Covid-19 cases, taking its the caseload tally to 11,015,863. Traders took encouragement as India Ratings and Research has revised its outlook on the overall banking sector to stable for the fiscal 2021-2022 (FY22) from negative even as it sees higher stress emerging in the retail loan segment going ahead. For public sector banks (PSBs), the outlook has been revised to stable from negative and for private banks. Some support also came with domestic rating agency Icra stating that the monthly collections, including overdues in its rated retail loan pools originated largely by NBFCs and HFCs, have reached pre-moratorium levels as of December 2020. However, it said for its rated microfinance players, collections are yet to reach the pre-moratorium levels. However, key gauges trimmed most of their gains in final hour of trading session, as investment through participatory notes (P-notes) in the Indian capital market dipped marginally to Rs 84,976 crore as on January 31 after hitting 31-month high value at the end of the preceding month. At December-end, the investment through such instruments had risen to a 31-month high of Rs 87,132 crore, reflecting the bullish stance of FPIs. Separately, pitching for a status quo on rates at the last meeting of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das has opined that the growth momentum needs to be strengthened for a sustained revival of the economy and for a quick return of the level of output to the pre-COVID trajectory. Finally, the BSE Sensex rose 7.09 points or 0.01% to 49,751.41, while the CNX Nifty was up by 32.10 points or 0.22% to 14,707.80.