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Markets likely to make flat-to-negative start
Jan-15-2021

Indian markets ended at a record close on Thursday as IT stocks trimmed some losses after falling in early deals despite robust results of Wipro and Infosys. Today, the markets are likely to make flat-to-negative start tracking a dip in Wall Street overnight and a rise in oil prices. There will be some cautiousness as rating agency CRISIL projected CPI Inflation at 6.4% for fiscal 2021. it said after eight months above the Reserve Bank of India (RBI's) target band of 2-6%, Consumer Price Index (CPI) inflation was finally back in range, declining for the second straight month to a below-consensus 4.6% in December, from 6.9% in November. Average CPI inflation during April-December now measures 6.6%, down from the April-November average of 6.9%. Traders will be concerned as India registered 15,515 fresh Covid-19 cases in the last 24 hours, taking the tally to 10,528,346. Globally, more than 93.5 million people have been infected by the virus. However, some respite may come later in the day with report that Prime Minister Narendra Modi will launch India's Covid-19 vaccination drive tomorrow via video conferencing. This will be the world's largest vaccination programme covering the entire length and breadth of the country. Meanwhile, the government has notified a modified scheme to provide financial assistance to distilleries producing first-generation ethanol from feedstocks, including cereals. Besides, the Budget session of Parliament will commence from January 29, with Union Finance Minister Nirmala Sitharaman set to present the Union Budget on February 1. There will be some buzz in IT stocks with ICRA’s report that demand for digital technologies and resumption of normal economic activities will drive sales for IT companies, and the sector will post a revenue growth of up to 9 per cent in 2021-22. Auto stocks will be in focus with industry body SIAM’s statement that passenger vehicle wholesales in India slipped to a ten-year low in the April-December this fiscal, and the industry will have to work hard to regain better volumes and business health. NBFCs stocks will be in limelight amid a private report that non-banking finance companies (NBFCs) urged the Reserve Bank of India to relax compliance with norms for reserve ratio, priority sector and sectoral exposure while transforming into a bank. There will be some earnings announcements too to keep the markets buzzing.

The US markets settled lower on Thursday as reports emerged about U.S. President-elect Joe Biden’s pandemic aid proposal following earlier data that showed a weakening labor market. Asian markets are trading mostly in green on Friday as expectations of large U.S. stimulus under President-elect Joe Biden shored up sentiment.

Back home, Indian equity benchmarks managed to end the choppy day of trade with marginal gains on Thursday. Markets made a negative start as traders remained cautious on report that India registered 17,015 fresh Covid-19 cases in last 24 hours, taking the tally to 10,512,8311. The five most affected states by total cases are Maharashtra (1974488), Karnataka (928806), Andhra Pradesh (885234), Tamil Nadu (827614), and Kerala (819765). Sentiments also remained dampened with Fitch Ratings stating that the Indian economy will suffer lasting damage from the coronavirus crisis and after an initial strong rebound in FY22 (fiscal year ending March 2022) growth will slow to around 6.5 per cent a year over FY23-FY26. Fitch said India’s coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support. However, in second half of the trade, key gauges gained some traction and managed to end the day with marginal gain after India’s inflation based on wholesale price index (WPI) eased to 1.22% (provisional) for the month of December 2020 as compared to 2.76% during the corresponding month of the previous year. Component wise, primary articles index having weight of 22.62%, declined by (-3.11%) to 146.5 (provisional) in December 2020 from 151.2 (provisional) for the month of November 2020. Traders also took some support with a private report that economic activity continued with its pace of normalisation and the festivities helped narrow the deficits as compared to the year-ago period in December. It also revised up wits FY21 GDP forecast to a contraction of 6.7 per cent, as against the official estimate of a 7.7 per cent contraction in the pandemic-impacted fiscal year. Finally, the BSE Sensex rose 91.84 points or 0.19% to 49,584.16, while the CNX Nifty was up by 30.75 points or 0.21% to 14,595.60.
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