Markets likely to open in green on Monday

Indian markets finished session higher on Friday as gains in banks and financial stocks pushed the benchmarks higher. Today, the markets are likely to open in green following positive cues from Asian peers. Traders will be taking encouragement as the National Statistical Office (NSO) in its first advance estimate indicated that the Indian economy remains on track to regain its position as the world's fastest-growing major economy and put the GDP expansion at a tempered 9.2 per cent this fiscal amid concerns over the impact of a resurgent virus on the fragile recovery. Also, an SBI Ecowrap report said India's real GDP is expected to grow at around 9.5 per cent in 2021-22 on a year-on-year (YoY). Some support will come with report that after three months of selling spree, foreign investors have turned net buyers in the first week of January by infusing Rs 3,202 crore in Indian equities, as correction in markets provided them good buying opportunity. Though, some cautiousness may come as the Confederation of All India Traders (CAIT) said increase in Covid cases along with imposition of various restrictions by different states have had an adverse impact on business and economic activities across the country. Besides, the RBI data showed the country’s foreign exchange reserves declined by $1.466 billion to $633.614 billion in the week ended December 31. In the previous week ended December 24, the reserves dipped by $587 million to $635.08 billion. Meanwhile, the government has decided not to impose anti-dumping duty on certain steel products being imported from countries like China, Japan, and Korea, as the finance ministry has not accepted the recommendations of the directorate general of trade remedies (DGTR). There will be some buzz in the insurance industry stocks with report that after a stellar performance in November - following a poor show in October - the new business premium (NBP) of life insurance companies was largely flat in December. FMCG stocks will be in focus with a report that FMCG companies witnessed an increase in demand in the past two weeks as consumers stocked up in the wake of rise in COVID-19 cases across the country, and have ramped up supplies to their stockists to avoid supply shortage. There will be some reaction is power stocks as total outstanding dues owed by electricity distribution companies (discoms) to power producers rose 4.4 per cent year-on-year to Rs 1,21,030 crore in January 2022.

The US markets ended lower on Friday as treasury yields rose in anticipation Federal Reserve will raise rates as soon as March. Asian markets are trading mostly in green on Monday as investors kept an eye on rising interest rates and coronavirus cases.

Back home, Indian equity benchmarks managed to end higher in highly volatile trade on Friday led by gains in basic materials, oil and gas and energy stocks. The beginning was upbeat as traders took encouragement with report which claimed that the Emergency Credit Line Guarantee Scheme (ECLGS) launched by the government in 2020 to provide relief to MSMEs impacted by COVID-19 pandemic has saved 13.5 lakh firms from going bankrupt and consequently 1.5 crore jobs. The street were getting relief with private report stated that private equity investments hit a record high of $40.1 billion in 2021, an increase of over 15 per cent from the previous year, led by a $3.6 billion flow into Flipkart and $1.93 billion into Bundl Technologies.  The strength in the markets was being supported as the finance ministry released monthly revenue deficit grant to 17 states totalling Rs 9,871 crore. So far, an amount of Rs 98,710 crore has been released to 17 states as post devolution revenue deficit grant in the current financial year. However, the headline indices were sharply off their respective day's highs and traded with marginal losses in afternoon deals, as caution prevailed among investors globally amid increasing cases of the Omicron variant of COVID-19. Traders turned anxious with India Ratings and Research’s statement that the Omicron variant spread will impact the January-March quarter GDP by 0.40 per cent and shave off 0.10 per cent from the FY22 growth, as many states resort to restrictions to limit infections. But, selling proved short-lived as key gauged bounced back into green terrain in late hour of trade, taking support from a senior government official said that the Omicron wave of coronavirus is unlikely to have much impact on India's economic growth, not more than of 5-10 basis points. Traders took note of report that amid fears that the new coronavirus variant may disrupt normal business activity, industry chamber CII pitched for coordinated actions by the Centre and state governments to minimize the impact of Omicron on the economy.  Finally, the BSE Sensex rose 142.81 points or 0.24% to 59,744.65 and the CNX Nifty was up by 66.80 points or 0.38% to 17,812.70.