Markets likely to turn bullish with positive start on Wednesday

Indian markets fell for a fourth consecutive session on Tuesday, though markets ended well off their day's lows, taking cues from gains in European equities.  Today, markets are likely to turn bullish with positive start as global sentiments improve on in-line US inflation report. Traders will be getting encouragement as Minister of State for Finance Pankaj Chaudhary said the government is taking steps to make India a $5 trillion economy earlier than the International Monetary Fund’s forecast year of 2026-27. The IMF’s World Economic Outlook earlier said the size of the Indian economy will increase from $3.2 trillion in 2021-22 to $3.5 trillion in 2022-23 and cross $5 trillion in 2026-27. Some support will come as Anurag Jain, the secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), said that inclusion and equity are important for India to transform into a developed nation, with technology aiding this growth. Traders may take note of India’s G20 Sherpa Amitabh Kant’s statement that with a third of the global economy expected to reel from recession in 2023, it is imperative upon the G20 nations to push for inclusive, resilient, and sustainable growth in their deliberations. However, there may be some cautiousness amid foreign fund outflows. Foreign institutional investors (FII) sold shares worth Rs 3,086.96 crore on March 14, the National Stock Exchange's provisional data showed. There will be some buzz in tyre industry stocks as Automotive Tyre Manufacturers' Association Chairman Satish Sharma said export of tyres from India is expected to rise by 15 per cent in the ongoing fiscal. Banking stocks will be in focus with report that a structural change in the liquidity landscape brought about by much lower surplus cash and booming credit growth has resulted in a surge in banks’ reliance on short-term funding avenues in the current financial year. Reserve Bank of India (RBI) data shows that in the current financial year, so far, bank borrowings have averaged Rs 4.2 trillion, against Rs 2.6 trillion in the previous financial year. Meanwhile, the government said the country has exported wheat worth Rs 11,728.36 crore during the April-January period of this fiscal year.

The US markets ended higher on Tuesday as largely on-target inflation data and easing jitters over contagion in the banking sector cooled expectations regarding the size of the rate hike at the Federal Reserve's policy meeting next week. Asian markets are trading in green on Wednesday tracking overnight gains on Wall Street.

Back home, Indian equity benchmarks ended lower for the fourth consecutive session on Tuesday, due to losses in IT, Utilities and TECK stocks. After making a cautious start, key gauges traded marginally higher as traders took support with Commerce and Industry Minister Piyush Goyal’s statement that the country's goods and services exports are marching ahead to cross $750 billion in the current financial year and talks for expanding rupee trade with certain countries are at an advanced stage. However, markets soon slipped into red as traders got cautious after India’s CPI inflation in February remained above RBI’s tolerance range indicating more rate hikes in future. India's consumer price inflation (CPI)-based inflation eased marginally to 6.44 per cent in February, compared to 6.52 per cent in January. Besides, as per a private report, the Reserve Bank is likely to hike benchmark lending rates by 25 basis points in its bi-monthly policy next month to bring down inflation within the central bank’s comfort zone. Some concern also came as the National Stock Exchange's provisional data showed foreign institutional investors (FII) sold shares worth Rs 1,546.86 crore on March 13. But, markets tried to recoup losses in the middle amid easing wholesale inflation. India’s inflation based on wholesale price index (WPI) declined further to 3.85% for the month of February 2023 against 4.73% recorded in January 2023, on account of fall in prices of crude petroleum & natural gas, non-food articles, food products, minerals, computer, electronic & optical products, chemicals & chemical products, electrical equipment and motor vehicles, trailers & semitrailers. The wholesale inflation was 4.95% in December 2022. Some relief came with the latest FICCI Manufacturing Survey report stating that with growth expected to continue for the Indian manufacturing sector in Jan-March 2022-23, there are signs that cost pressure witnessed in the last many months seems to be softening a bit for the sector. Though, markets failed to hold recovery and once again fell sharply in late afternoon deals amid continued global uncertainty. Finally, the BSE Sensex fell 337.66 points or 0.58% to 57,900.19 and the CNX Nifty was down by 111.00 points or 0.65% to 17,043.30.