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Markets likely to get cautious start on Wednesday
Jan-20-2021

Indian markets ended higher on Tuesday, with key benchmark indexes climbing around 2 percent, as optimism about China's economy and hopes for further global stimulus helped spur buying across the board. Today, the markets are likely to make cautious start tracking mixed Asian cues. There will be some cautiousness as India recorded 13,700 fresh cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen below 200,000, while the caseload tally stands at 10,596,442. Globally, 96.6 million people have been infected by the virus. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases, according to data from Worldometer. however, some support may come later in the day with a private report that the ongoing key reforms such as sops for manufacturing, easier labour laws, wooing FDI inflows and privatisation will help improve productivity and support long-term growth at 7.5-8 per cent levels, which if played out well, can help India contribute 15 per cent of global GDP growth by FY2026. Also, Investment through participatory notes (P-notes) in the domestic capital market rose to a 31-month high of Rs 87,132 crore at December-end, reflecting the bullish stance of FPIs. Traders may take note of Niti Aayog CEO Amitabh Kan’s statement that India must remain an integral part of the global economy if it has to grow at 9-10 per cent over the next three decades. Meanwhile, In the primary market, the three-day initial public offering of Indigo Paints will open for public subscription today. The price band has been fixed at Rs 1,488-1,490 per share for the initial share sale.

The US markets ended higher on Tuesday on the back of US Treasury Secretary nominee Janet Yellen’s push for a sizable fiscal relief package in response to the Covid-19 pandemic. Asian markets are trading mixed on Wednesday as investors assessed comments suggesting a tough line from Joe Biden’s incoming administration toward China.

Back home, Bulls made strong comeback on Dalal Street on Tuesday with frontline gauges settling with a gain of over one and a half percent. The investors’ mood remained up-beat throughout the day and there appeared not even an iota of profit booking, as investors continued hunt for fundamentally strong stocks. Markets made a gap up opening as traders got boost with ICRA’s report stating that economic activity recorded a broad-based improvement in December as against November, showing a return of demand. ICRA said most of the indicators have displayed a year-on-year (y-o-y) expansion in December 2020, which signals a tentative return to pre-COVID normalcy. Sentiments also got some support with report that India recorded 9,975 fresh cases of the coronavirus disease (Covid-19), the lowest daily rise since June 8, 2020, resulting in the total active cases in the country falling below 205,500. The death toll has increased to 152,593. India's caseload tally stands at 10,582,647. Markets extended gains with traders taking support with report that the Finance Ministry has released the 12th instalment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount released so far under this window to Rs 72,000 crore. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of Goods and Services Tax (GST). Traders were also energized as Reserve Bank of India (RBI) is likely to spend at least $20 billion more to support the rupee and increase the forex kitty through the reminder of the financial year, taking its overall forex intervention to $93 billion. Traders also took note of report that India offers tremendous business opportunities to the US in various sectors such as manufacturing and the COVID-19 pandemic has presented a unique opportunity to the country to work with America to build resilient and reliable supply chains that will have the ability to weather future shocks, eminent speakers told a virtual forum ahead of the India Subcontracting Expo. Finally, the BSE Sensex soared 834.02 points or 1.72% to 49,398.29, while the CNX Nifty was up by 239.85 points or 1.68% to 14,521.15.
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