Benchmarks likely to get positive start amid firm global cues

Indian equity benchmarks are likely to get a positive start on Thursday tracking overnight rally on Wall Street and Treasury yields pulled back after lower-than-expected core inflation readings boosted prospects of at least two rate cuts by the Federal Reserve during this year.

Some of the key factors to be watched:

India to become 4th largest economy by 2026: Industry body PHDCCI said India's economy is expected to become the fourth largest in the world by 2026, surpassing Japan, as it projected the nation's GDP to grow 6.8 per cent in the current financial year ending March and 7.7 per cent in FY26.

India's fiscal conditions to constrain credit strength in 2025: Moody's Ratings said India's fiscal conditions will continue to constrain its credit strength in 2025, although tension in US-China relations could benefit the Indian economy. It said growth and inflation are levelling out, with strong domestic demand bolstered by modest easing in global and regional financial conditions.

Indian companies’ foreign borrowings plunges in 2024: Indian companies’ foreign borrowings plunged 20.2 per cent to $23.33 billion in 2024, down from $29.22 billion a year earlier. 

India’s investments in green infrastructure to grow in next five years: market intelligence firm CRISIL said India’s investments in green infrastructure and energy projects will grow five-fold over the next five years to Rs 31 trillion.

All eyes will be on Q3 earnings: Major players like Infosys, Reliance Industries (RIL), and Axis Bank prepare to announce their results. Additionally, companies such as Havells India, LTIMindtree, D B Corp, Wilson Renewable Energy, and Waaree Renewable Technologies are among others set to disclose their Q3 financial results today.

On the global front, the US markets ended higher on Wednesday as lower-than-expected December core inflation data and solid earnings from major U.S. banks fueled a rally. Asian markets are trading in green on Thursday following overnight gains on Wall Street. 

Back home, Indian equity benchmarks erased some gains but managed to end in green for the second consecutive session on Wednesday amid buying in Utilities, Power and Realty stocks. Finally, the BSE Sensex rose 224.45 points or 0.29% to 76,724.08, and the CNX Nifty was up by 37.15 points or 0.16% to 23,213.20.

Some of the important factors for the markets:

India’s exports contracted 1% to $38.01 billion in December: India’s merchandise exports dipped by about 1 per cent to $38.01 billion in December 2024 against $38.39 billion a year ago. Imports increased by 4.8 per cent to $59.95 billion in December 2024 compared to $57.15 billion in the year-ago month. The trade deficit stood at $21.94 billion during the month under review.  

U.S. dollar and Treasury yields retreated: The dollar retreated slightly following a tame reading on US producer prices on Tuesday, which pulled Treasury yields off their highs, putting the focus on the release of US consumer inflation later in the session. 

Rupee gained for 2nd straight day: Indian rupee gained for the second straight day and was up by 12 paise at 86.40 (provisional) against the US dollar, tracking favourable cues from domestic equity markets and softening crude oil prices. 

FII outflows capped gains: According to exchange data, foreign institutional investors (FIIs) offloaded shares worth Rs 8,132 crore on January 14, marking the largest single-day selling in this calendar year (CY2025).