Markets likely to make positive start on firm global cues

Domestic equity indices ended lower on Wednesday as traders were indulging in booking profits.  Markets were closed on Thursday, January 26, for Republic Day. Today, markets are likely to make positive start on frim global cues. Traders may get support as Hamid Rashid. Head, Global Economic Monitoring at United Nations, has said India is a bright spot in the world economy currently and is on a strong footing, projected to grow at 6.7 per cent next year, a very high growth rate relative to other G20 member countries. This is a sustainable growth rate for India. India also has a significant number of people living in poverty. So this would be a great boost. If India can sustain this growth rate in the near term, that would be good for the Sustainable Development Goals, good for poverty reduction globally. Support may also come in as the President of India said most sectors of the economy have shaken off the pandemic effect and the nation has been among the fastest-growing major economies. Traders may take note of RBI Executive Director Ajay Kumar Choudhary’s statement that digital currency will further bolster the digital economy, make payment system more efficient, reduce cost involved in physical cash management and also contribute to further financial inclusion.  Adani Group's Rs 20,000-crore FPO will open for subscription today, and will run till January 31.

On the global front, the US markets ended higher on Thursday as traders combed through the latest batch of corporate earnings and fourth-quarter gross domestic product that came in above expectations. Asian markets were trading higher on Friday as Wall Street’s major indexes gained after the US economy grew more than expected.

Bach home, Indian equity benchmarks witnessed selling pressure throughout the session and ended with losses of over a percent on Wednesday as market participants booked profit ahead of upcoming Union Budget 2023-24 to be announced on February 1, 2023. Local bourses made negative start and extended selloff as the day progressed. Sentiments were dampened as exchange data showed Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday as they sold shares worth Rs 760.51 crore. Some anxiety spread among the investors with private report stating that Venture capital (VC) investments in Indian startups plunged over 38 per cent in 2022 as economic uncertainty and market volatility affected fundraising and investment activities. Bourses continued to reel under pressure in late afternoon deals, due to heavy selling in Utilities, Power and Banking shares amid mixed global trends. Traders remained concerned as ICRA Ratings said after remaining stable for many weeks, the cost of borrowing for states inched up by 5 basis points to 7.64 per cent at Tuesday's auction when 15 of them raised Rs 25,700 crore from the market. Traders took note of a private report stating that the Centre is likely to cut its 2023-24 (FY24) fiscal deficit in the range of 5.8-5.9 per cent of the GDP from 6.4 per cent in FY23. However, the deficit is expected to remain much larger than the 4-4.5 per cent of the GDP that was usual for decades. Furthermore, a weak economic growth outlook that stoked recession fears pulled down global markets. Finally, the BSE Sensex fell 773.69 points or 1.27% to 60,205.06 and the CNX Nifty was down by 226.35 points or 1.25% to 17,891.95.