Indian markets ended 2 percent higher on Wednesday, tracking strong buying in financial stocks with the Nifty Bank surging over 1,400 points, after trading hours were extended till 5:00 PM following a technical glitch at NSE. Today, the markets are likely to make gap-up start following a rally in global markets. There may be some volatility in the markets ahead of the February F&O expiry. Traders will be taking encouragement with a private report that India's economy is likely to have returned to growth in the December quarter due to the easing of restrictions on movement after the first wave of the coronavirus epidemic peaked. Some support will come as the Reserve Bank of India (RBI) announced yet another round of Open Market Operations (OMO) or simultaneous purchase and sale of gilts on March 4. Under this, the RBI will buy Rs 15,000 crore worth bonds in four different papers and sell Rs 150,000 crore worth bonds in two different securities. However, there may be some cautiousness as India’s count of active cases once again topped the 150,000 mark. On Wednesday, the country registered 17,106 fresh Covid-19 cases, taking its the caseload tally to 11,046,432. India continues to be second-most-affected globally, and ranks 14th among worst-hit nations by active cases. Banking stocks will be in focus as bank unions under the umbrella body All India Bank Employees' Association (AIBEA) opposed the government's decision to allow all private sector lenders in government-related business, saying it was unfair and to the disadvantage of public sector banks (PSBs). The finance ministry, in a statement, said all private sector banks can now participate in government-related businesses like collection of taxes, pension payments and small savings schemes. There will be some reaction in PSU stocks as Prime Minister Narendra Modi made his strongest pitch for privatisation of non-strategic public sector units (PSUs), saying the government has no business to be in business and sustaining loss-making units on taxpayers' money drains resources that could otherwise have been spent on public welfare schemes. Aviation stocks will be in limelight as global airline industry body IATA warned that the outlook for airlines had weakened since its December forecasts, and due to tightening travel restrictions it now expected the sector to still be bleeding cash by the fourth quarter of this year. There will be some buzz in pharma and IT hardware stocks as extending the Production-Linked Incentive (PLI) scheme to more sectors, the Union Cabinet approved Rs 15,000 crore for incentives to domestic manufacturing of pharmaceuticals and Rs 7,350 crore for production of laptops, tablets, all-in-one personal computers and servers in India. Meanwhile, the 100-crore Nureca initial public offering (IPO), which received nearly 40 times subscription, is set to make its share market debut on Thursday. During February 15-17, 2021. The home healthcare and wellness products seller issue was sold in the price band of Rs 396-400 apiece.
The US markets ended higher on Wednesday shaking off early weakness after Federal Reserve Chair Jerome Powell’s comments calmed inflation worries. Asian markets are trading in green on Thursday after US Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low, calming market fears that higher inflation might prompt the central bank to tighten the monetary spigot.
Back home, Indian equity benchmarks ended significantly higher on Wednesday after trading hours were extended following a technical glitch at NSE. Markets made optimistic start, as traders took 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 also came in as Agriculture Minister Narendra Singh Tomar said that the government's decision to increase the agriculture credit target to Rs 16.5 lakh crore for the next fiscal will help in easing the liquidity crunch of farmers. However, trading has been halted on NSE due to a technical glitch as the live price quotes of spot Nifty and Bank Nifty indexes have stopped updating. Post resumption of trade, benchmark indices shot up specularly in an unprecedented extended session, as private banks edged higher after Centre lifted the embargo on grant of government business to private banks, enabling banks to participate in all developmental activities. Finance Minister Nirmala Sitharaman said that Private Banks can now be equal partners in development of the Indian economy, furthering the government's social sector initiatives and enhancing customer convenience. Traders also took some support with Union Minister Sadananda Gowda’s statement that the chemicals and petrochemicals sector has huge potential and can contribute significantly towards achieving the government's target of $5 trillion economy. He also said India has potential to become a global petrochemical hub & factors like high GDP growth, presence of skilled manpower, big domestic market makes India an attractive platform for investment in the sector. Traders took a note of Niti Aayog CEO Amitabh Kant’s statement that India now needs to get into cutting edge technology in order to boost its exports which will benefit sectors such as telecom, automobiles, battery storage devices, and solar energy, among others. Finally, the BSE Sensex rose 1030.28 points or 2.07% to 50,781.69, while the CNX Nifty was up by 274.20 points or 1.86% to 14,982.00.
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