Markets likely to get flat-to-negative start on weak global cues

Indian markets ended higher for the second consecutive day on Tuesday with financials and IT stocks leading the surge. Today, markets are likely to get flat-to-negative start tracking overnight losses on Wall Street. Investors will be eyeing the services PMI data to be out later in the day. Traders will be concerned as the economic think tank -- Global Trade Research Initiative (GTRI) said the Indian economy and exports will be moderately impacted in 2023 by weak global demand and recession in large economies and to improve its current account, the country should aim at reducing energy import bill. There will be some cautiousness as Micro-Finance Institution Network (MFIN), a self-regulatory organisation (SRO) recognised by RBI, said that outstanding loan portfolio of the micro-finance institution (MFI) sector across India will increase around 20.3 per cent at Rs 3.25 lakh crore in 2022-23 compared to the previous fiscal. Traders may take note of a private report that forty Indian corporates raised Rs 59,412 crore through main board IPOs in calendar year 2022, half of the Rs 1,18,723 crore (all-time high) mobilised by 63 IPOs in 2021. There will be some buzz in the road logistics sector stocks as rating agency Icra revised its growth estimates for the Indian road logistics sector to 11-13 per cent for the current fiscal against the previous estimate of 7-9 per cent. The rating agency said the growth is supported by a strong demand environment, coupled with the continuation of firm freight rates. Aviation industry stocks will be in focus as the monthly domestic air passenger traffic touched 1.29 crore to cross the pre-COVID level in December 2022, and Civil Aviation Minister Jyotiraditya Scindia termed it as a healthy trend and a good sign for the industry. There will be some reaction in M&E industry stocks as ratings agency Crisil said the Indian media and entertainment (M&E) industry may report a 12-14 per cent year-on-year growth in revenue for the financial year ended March 31, 2024 (FY24) to Rs 1.6 trillion, lower than the 16 per cent revenue growth likely in FY23. Leather industry stocks will be in limelight as Commerce and Industry Minister Piyush Goyal said the government is considering a new scheme to support domestic manufacturing of machinery and accessories used in the leather industry. Meanwhile, Cash Management is likely to debut on the markets, amid muted response to the IPO (subscribed only 53 per cent).

The US markets ended lower on Tuesday with the biggest drags from Tesla and Apple, while investors worried about the Federal Reserve's interest-rate hiking path as they awaited minutes from its December meeting. Asian markets are trading mostly in green on Wednesday amid investors await the US Job Openings and Labor Turnover Survey, as well as the minutes of the Fed's latest policy meeting due later today.

Back home, Indian equity benchmarks, after facing bouts of volatility during the session, ended with gains for the second consecutive day on Tuesday amid a largely firm trend in global markets. After opening in the negative territory, key gauges soon turned positive to trade with marginal gains as traders took support with Assocham’s statement that India's economy is expected to navigate rough global weather in 2023 due to resilient consumer demand, better corporate performance and abating of inflation, even as the year is likely to be full of challenges and opportunities. Traders also took a note of the Ports, Shipping and Waterways minister Sarbananda Sonowal's statement that public-private partnership in port infrastructure has been an important source of investment in the sector and the Ministry of Ports, Shipping and Waterways (MoPSW) has a pipeline of 44 projects for total investment of Rs 22,900 crore till 2024-25. However, markets erased gains and once again fell into red terrain in afternoon deals, amid foreign fund outflows. Foreign institutional investors (FII) net sold shares worth Rs 212.57 crore on January 2, as per provisional data available on the NSE. Traders were also concerned as the IMF chief has said that one third of the global economy will be in recession this year, and warned that 2023 will be tougher than last year as the US, EU and China will see their economies slow down. Some concern also came as the economic think tank Global Trade Research Initiative (GTRI) said that the Indian economy and exports will be moderately impacted in 2023 by weak global demand and recession in large economies and to improve its current account, the country should aim at reducing energy import bill. GTRI said that in 2022, India will pay USD 270 billion in imports of crude oil and coal, which is about 40 per cent of total merchandise import bill. But, markets managed to end the session in green terrain led by Consumer Durables, Healthcare and IT stocks. Finally, the BSE Sensex rose 126.41 points or 0.21% to 61,294.20 and the CNX Nifty was up by 35.10 points or 0.19% to 18,232.55.