Benchmarks likely to get pessimistic start on Thursday

Indian markets snapped an eight-day losing streak and ended higher on Wednesday amid buying across sectors. Today, start of session is likely to be pessimistic on weekly F&O expiry amid weak global cues. Continued foreign fund outflows likely to dent sentiments in the markets. Foreign institutional investors (FII) sold shares worth Rs 424.88 crore on March 1, the National Stock Exchange's provisional data showed. There will be some cautiousness with report that the government collected Rs 1.50 lakh crore as Goods and Services Tax (GST) in February, the finance ministry said on March 1. The GST collections for February fell from Rs 1.58 lakh crore in January. Traders may take note of Chief Economic Advisor V Anantha Nageswaran’s statement that the performance of the manufacturing sector and growth rate in private consumption expenditure in the December quarter of 2022-23 is appearing ‘depressed’ because of higher base. There will be some buzz in auto stocks with private report that the domestic passenger vehicle (PV) industry remained on a steady growth path in February, recording a 10.6 per cent year-on-year (YoY) rise in sales. The wholesale figure of 335,269 units was the best ever for the month of February; it was 303,213 units a year ago. Coal industry stocks will be in focus with report that India's coal production increased by 15.10 per cent to 784.41 million tonnes during April 2022-February 2023 as compared to 681.5 million tonnes produced during the same period of last year. There will be some reaction in gas sector stocks as the latest rise in prices by Rs 50 has taken the prices of domestic cooking gas to their highest levels since February 2014. Banking stocks will be in limelight as India Ratings said the gross non-performing assets (NPA) ratio of banks is expected to improve to 3.3 percent in next financial year from 4.2 percent in FY23. A loan turns to NPA if there are no repayments of interest or principal for a period of 90 days.

The US markets ended mostly in red on Wednesday as Treasury yields jumped after manufacturing data indicated inflation is likely to remain stubbornly high. Asian markets are trading mixed on Thursday tracking lackluster trade overnight on Wall Street.

Back home, halting their eight days of decline, Indian equity benchmarks witnessed a relief rally and logged smart gains on Wednesday as broad-based buying on the back of short covering and uptick in European and select Asian indices aided the sentiment. Markets opened on a positive note and continued to inch higher throughout the day as traders took encouragement with Chief Economic Advisor V Anantha Nageswaran’s statement that high frequency data indicate buoyant economic growth momentum and the 7% GDP growth estimate for the current fiscal is very realistic. Some optimism also came as production of eight infrastructure industries - the core sector - expanded 7.8% year-on-year (YoY) in January, its fastest pace in four months, owing to a lower base and a near all-round showing.  Buying further crept in as Moody's Investors Service raised India's economic growth estimate for 2023 to 5.5 per cent from 4.8 per cent pegged earlier, on the back of a sharp increase in capital expenditure in the Budget and a resilient economic momentum. Key indices extended gains in late afternoon deals and settled near day’s high points, taking support from the second advance estimates of national income showing that the Gross Value Added (GVA) in agriculture and allied activities is projected to clock its best growth in FY23 during the October-to-December quarter, at 3.7 per cent, on the back of a strong kharif harvest. In the third quarter of FY22, GVA in the sector was 2.3 per cent at constant prices. Traders paid no heed towards reports that India's gross domestic product (GDP) growth rate fell for the second consecutive quarter in October-December, coming in at 4.4%, it is lower than the 6.3% growth in the second quarter of 2022-23.  Traders also overlooked a private survey report showing that India's manufacturing sector expanded at the slowest pace in four months in February amid rising borrowing costs & weakness in the sector. However, the sector remained relatively strong amid buoyant domestic demand, despite higher inflationary pressures. India's S&P Global Manufacturing Purchasing Managers' Index remained largely unchanged at 55.3 in February from January's 55.4. It was well above the 50-mark separating expansion from contraction for a 20th straight month. Finally, the BSE Sensex rose 448.96 points or 0.76% to 59,411.08 and the CNX Nifty was up by 146.95 points or 0.85% to 17,450.90.