Indian equity markets likely to make gap-up opening amid gains across global markets

Indian benchmarks ended higher on Tuesday led by market heavyweights HDFC, Bharti Airtel and Ultratech Cement. Today, Indian equity markets are likely to make gap-up opening amid gains across global markets. There will be some encouragement as Crude oil fell and investors celebrated signs of progress in negotiations between Russia and Ukraine. Traders may also get support with Finance Minister Nirmala Sitharaman’s statement India’s sharp economic recovery post COVID-19 and Budget initiatives will help in sustaining growth momentum in the years to come.  She stated the government’s road map for imparting momentum to the economy focusses on growth at the macro level and complementing it with all-inclusive welfare at the micro level, promoting digital economy and fintech, technology-enabled development, energy transition and climate action and relying on a virtuous cycle of investment and growth. Meanwhile, she said FDI into the country during the Modi government was USD 500.5 billion, which is 65 per cent more than the amount received in the 10 years of the UPA government, as investors have trusted the economic management of the current regime. However, some cautiousness may come latter in day as rating agency Icra has slashed India’s GDP forecast for financial year 2022-23 to 7.2 per cent from eight per cent projected earlier, due to elevated commodity prices and supply chain disruptions caused by an ongoing war and lockdowns in China. For the financial year ending March 31, the agency has lowered its GDP growth projection to 8.5 per cent, moderately lower than the National Statistical Office’s (NSO) second advance estimate of 8.9 per cent. There may be some buzz in pharmaceutical sector stocks as Union minister Mansukh Mandaviya said manufacturing of 35 active pharmaceutical ingredients, which have been imported earlier, has started in India under the production linked scheme for the pharmaceuticals sector. These 35 active pharmaceutical ingredients (APIs) are among the 53 APIs, for which India has 90 per cent import dependence. Gem and jewellery stocks may be in focus as Commerce and Industry Minister Piyush Goyal called upon gem and jewellery exporters to target USD 100 billion of exports annually in the coming years as the sector holds huge potential to boost outbound shipments.

The US markets ended higher on Tuesday as investors welcomed encouraging economic data and as talks on ending the war in Ukraine showed signs of progress. Asian markets are trading mostly higher in early deals on Wednesday as global shares rallied on news that peace talks over Ukraine are making progress.

Back home, Indian equity benchmarks ended higher for second straight session on Tuesday led by market heavyweights HDFC, Bharti Airtel and Ultratech Cement amid positive cues in the global market. Solid decline in crude oil prices and ceasefire talks between Russia and Ukraine boosted market sentiments. Markets made optimistic start and stayed in green for whole day, as traders took encouragement as Commerce and industry Minister Piyush Goyal said the free trade agreement between India and the UAE has opened huge opportunities and businesses of both countries should look at taking the bilateral trade to $250 billion by 2030. Some support also came in as Sumant Sinha, the newly elected president of Assocham, said that India needs a strong contract-enforcement agency, a simple GST regime and simplified taxation process along with a stable policy environment to significantly improve ease of doing business.  Key indices added gains in late afternoon deals, taking support from Crisil Ratings’ report stated that Reserve Bank of India’s (RBI) new rules for microfinance institutions (MFIs), who have been deeply impacted in the Covid 19 pandemic because of loan losses, will help widen profits by giving such entities greater flexibility in operations. Traders overlooked Ministry of Finance in its latest quarterly report on public debt management has showed that total liabilities (including liabilities under the Public Account) of the Government, was Rs 128,41,996 crore at end-December 2021 as against Rs 125,71,747 crore at end-September 2021. This indicates a quarter-on-quarter increase of 2.15 per cent in Q3 FY22. Meanwhile, S&P Global Ratings said that the Reserve Bank of India (RBI) would be compelled to signal a neutral policy stance in the Monetary Policy Committee’s review meeting in April as average consumer inflation is likely to stay firm at 5.4 per cent in FY23. It added the RBI will likely raise the repo rate by at least 50-75 basis points through fiscal year 2023, and by another 50 basis points in fiscal 2024. Finally, the BSE Sensex rose 350.16 points or 0.61% to 57,943.65 and the CNX Nifty was up by 103.30 points or 0.60% to 17,325.30.