Benchmark indices likely to get flat-to-negative start

Indian markets snapped the three-day losing streak and ended with strong gains on Monday mirroring firm cues from global markets. Today, benchmark indices are likely to get flat-to-negative start amid mixed cues from global markets and disappointing earnings from Tata Consultancy Services (TCS), the country's largest IT services company. Sustained selling by FIIs likely to dampen sentiments in the local markets. Foreign institutional investors (FII) net sold shares worth Rs 203.13 crore on January 9, as per provisional data available on the NSE. Traders will be concerned as the country's largest lender SBI dismissed the 'K-shaped recovery' critique, saying the pandemic was a 'leveler' which helped in reducing inequalities. However, some respite may come later in the day as Commerce and Industry Minister Piyush Goyal said huge investment opportunities are there in India due to its large domestic consumption demand, rule of law and transparent economy. He added India is a land of opportunity, and the Indian diaspora should take this message to the world. Some support may come as credit rating agency Moody's Investors Service said the credit worthiness outlook for sovereigns in the Asia-Pacific (APAC) region, including India for 2023 is stable as compared to the negative outlook for sovereigns globally. Meanwhile, Capital markets regulator SEBI has said payment mechanisms provided by banks and payment aggregators can be used for settlement of trades in the debt securities executed on the request for quote (RFQ) platform of stock exchanges. There will be some buzz in coal industry stocks with a private report that India's imports of thermal coal - used mainly for power generation - grew 14.7% to 161.18 million tonnes in 2022, driven by higher domestic production and shipments by utilities. Insurance industry stocks will be in focus as after witnessing strong growth in November, life insurers reported moderation in new business premium (NBP) growth in December. From a 30 per cent uptick in November, NBP growth last month slowed down to 10 per cent as state-owned Life Insurance Corporation’s premium growth decelerated from a peak. There will be some reaction in aviation industry stocks as the International Air Transport Association (IATA) said Asia-Pacific airlines saw their air cargo volumes decrease by 18.6 per cent in November 2022, compared to the same month in 2021. As per the IATA, this was the worst performance of all regions and a decline in performance compared to October (minus 14.7 per cent). There will be some earnings announcements too to keep the markets buzzing.

The US markets ended mostly in red on Monday as presidents of the U.S central bank's San Francisco and Atlanta branches said the Fed will have to keep raising rates to somewhere above 5 percent in order to slow down inflation. Asian markets are trading mixed on Tuesday tracking lackluster overnight cues from Wall Street.

Back home, Snapping a three-day losing streak, Indian equity benchmarks ended higher by around one and half percent on Monday amid positive trends in global markets and buying in TECK, IT and Power stocks. Markets opened higher and remained in positive territory throughout the day as traders took support with latest central bank data showing that the Reserve Bank of India’s foreign exchange reserves rose by $44 million to $562.85 billion in the week ended December 30. Sentiments remained up-beat with Commerce and Industry Minister Piyush Goyal’s statement that negotiations for bilateral free trade agreements with several countries are ‘well on track’ and India is also looking at some multilateral pacts that are fair and equitable for all the member countries. Buying further crept in with Crisil Ratings’ report stating that capital goods companies are poised to see revenue growth at a healthy 16-18 per cent during current financial year ending March 2023 on account of improved order flows. Revenue growth in the next financial year starting April 2023 too is expected to be in double digits. However, markets trimmed some gains in late afternoon deals, as some pessimism came with advanced estimates of National Income for 2022-23 revealed by the National Statistical Office (NSO) showing that Indian economy is likely to grow at 7 per cent in 2022-23 as compared to 8.7 per cent in 2021-22. The fall will mainly be due to poor performance of the manufacturing sector. Some cautiousness came as foreign institutional investors (FII) net sold shares worth Rs 2,902.46 crore on January 6, as per provisional data available on the NSE. But, markets regained traction to end higher, as some optimism remained among traders with Finance Minister Nirmala Sitharaman’s statement that the central government is engaging with states and local administrations to ensure that benefits of Ease of Doing Business (EoDB) initiatives reach the ground. She said EoDB is not just the Centre's responsibility but that of states as well. Finally, the BSE Sensex rose 846.94 points or 1.41% to 60,747.31 and the CNX Nifty was up by 241.75 points or 1.35% to 18,101.20.