Markets likely to get flat-to-positive start; Economic survey eyed

Indian markets ended a highly volatile session on a positive note on Monday after a day of carnage, backed by technology and select banking & financial services stocks. Today, markets are likely to get flat-to-positive start as investors await the Economic Survey of 2022-23. The Economic Survey, an annual report released by the Finance Ministry with complete analysis of the economy and projections for economic growth, will be tabled in Parliament today. There are expectations that India's annual pre-budget economic survey is likely to peg GDP growth at 6-6.8% for 2023-24. Some support will come as the International Monetary Fund (IMF) said inflation in India is expected to come down from 6.8 percent in the current fiscal year ending March 31 to 5 percent the next fiscal, and then drop further to 4 percent in 2024. Moreover, Pierre-Olivier Gourinchas, Chief Economist and Director, Research Department of the IMF said ‘our growth projections actually for India are unchanged from our October Outlook. We have 6.8 percent growth for this current fiscal year, which runs until March, and then we're expecting some slowdown to 6.1 percent in fiscal year 2023. And that is largely driven by external factors’. However, traders may be concerned as provisional data available on the NSE showed that foreign institutional investors (FII) have net-sold shares worth Rs 6,792.80 crore on January 30, 2023, the highest ever outflow in a single day since March 8, 2022. Cement industry stocks will be in focus as CARE Advisory and Research said with healthy demand drivers for cement - urban housing, government's infrastructure and rural development thrust, the industry is expected to close FY23 with a production of 380-390 million ton. Market participants continue to keep eye on earnings from many companies including Coal India, Power Grid Corporation of India, Sun Pharmaceutical Industries, UPL, ACC, Godrej Consumer Products, Indian Hotels, Indian Oil Corporation, Jindal Steel & Power to release their results later in the day.

The US markets ended lower on Monday ahead of the US Fed meeting, which begins later tonight, and big corporate earnings. Asian markets are trading mixed on Tuesday tracking overnight losses on Wall Street.

Back home, Indian equity benchmarks ended higher in a highly volatile trade on Monday on the back of recovery in IT, TECK and Telecom stocks. Key gauges made a negative start but soon turned positive as traders took support with latest data showing that the Reserve Bank of India’s (RBI’s) foreign exchange reserves climbed $1.7 billion to $573.73 billion in the week ended January 20.  The rise was on account of an increase in the RBI’s foreign currency assets as well as its gold holdings. But, markets failed to hold gains and slipped into red terrain in late morning deals, as market participants remained on sidelines ahead of crucial Union Budget to be presented on February 01 and a slew of central bank policy meetings due this week. Key gauges extended fall in late afternoon deals, as sentiments remained downbeat amid a private report stating that foreign investors have pulled out a net of over Rs 17,000 crore this month so far due to the attractiveness of the Chinese markets and the cautious stance adopted by them ahead of the Union Budget and US Federal Reserve meeting. The outflow in January came after a net inflow of Rs 11,119 crore in December and Rs 36,239 crore in November. However, markets erased all of their initial losses towards the end and settled higher.  Meanwhile, calling for the creation of an international network of mentors, investors and entrepreneurs to strengthen the global startup ecosystem, Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal has said that this network must support and inspire startups, act as a team to facilitate exchange of ideas, best practices and funding mechanisms and promote collaborations in Research and Development. Finally, the BSE Sensex rose 169.51 points or 0.29% to 59,500.41 and the CNX Nifty was up by 44.60 points or 0.25% to 17,648.95.