Indian equity markets resumed northward journey after two days of subdued move and gained over half a percent on Wednesday, supported by upbeat global cues. After the positive start, the markets gradually inched higher as the day progressed after the Reserve Bank of India's Monetary Policy Committee (MPC) decided to increase the repo rate by 25 basis points to 6.5%. The central bank pegged the GDP growth for FY24 at 6.4 per cent, and lowered the inflation forecast to 5.3 per cent. For FY23, the inflation estimate has been lowered to 6.5 per cent versus 6.7 per cent earlier. Some support also came as Niti Aayog member Arvind Virmani, appreciating Finance Minister Nirmala Sitharaman for continuing fiscal consolidation in the Budget for 2023-24, said it would help in reducing the cost of capital for Indian companies. He also said the large increase in capital expenditures by 33 per cent to Rs 10 lakh crore for infrastructure development will accelerate India's economic growth. Sentiments remained up-beat in late afternoon deals, taking support from RBI Deputy Governor MK Jain's statement that domestic banks' exposure to the Adani Group is not very significant, and the system is strong and large enough to not get impacted by a single case. Traders took a note of Reserve Bank Governor Shaktikanta's statement that the Current Account Deficit (CAD), a key indicator of the external sector, is expected to moderate in second half of 2022-23 (H2FY23) from 3.3 per cent of GDP in April-September mainly due to moderation in imports. He noted that CAD had widened to 3.3 per cent of GDP in first half of 2022-23 from 0.2 per cent in the comparable period of 2021-22 on the back of a sharp increase in the merchandise trade deficit. Meanwhile, provisional data available on the NSE showed that foreign institutional investors (FII) sold shares worth Rs 2,559.96 crore on February 7. Finally, the BSE Sensex rose 377.75 points or 0.63% to 60,663.79 and the CNX Nifty was up by 150.20 points or 0.85% to 17,871.70.

The US markets ended lower on Wednesday as some traders looked to cash in Tuesday's gains, which came amid a positive reaction to comments by Federal Reserve Chair Jerome Powell. Powell acknowledged recent indications of easing inflation but noted that the disinflationary process has a long way to go and cautioned further interest rate hikes could be needed. The positive sentiment generated in reaction to Powell's comments was partly offset by remarks by New York Fed President John Williams, who said interest rates may need to be kept at an elevated level for a few years to bring down inflation. Overall trading activity was somewhat subdued, however, with a relatively light economic calendar keeping some traders on the sidelines. Reports on initial jobless claims and consumer sentiment are likely to attract attention in the coming days, with the consumer sentiment report including readings on inflation expectations. On the sectoral front, Semiconductor stocks turned in some of the market's worst performances on the day, resulting in a 2.2 percent slump by the Philadelphia Semiconductor Index. Considerable weakness was also visible among interest rate-sensitive utilities stocks, as reflected by the 1.7 percent drop by the Dow Jones Utility Average. The average fell to its lowest closing level in almost three months. Housing stocks also showed a significant move to the downside, dragging the Philadelphia Housing Sector Index down by 1.6 percent.

Crude oil futures ended higher on Wednesday, magnifying their previous session's rally, amid hopes of higher demand from China. Oil prices rose despite data showing an increase in U.S. crude inventories last week. Data from U.S. Energy Information Administration (EIA) showed crude inventories in the U.S. rose by 2.423 million barrels in the week ended February 1, in line with expectations. The EIA data also showed gasoline inventories increased 5 million barrels last week, about four times the expected surge. Meanwhile, distillate stockpiles rose by 2.932 million barrels as against expectations for an increase of 0.097 million barrels. Benchmark crude oil futures for March delivery rose $1.33 or 1.7 percent at $78.47 a barrel on the New York Mercantile Exchange. Brent crude for April delivery surged $1.40 or 1.7 percent at $85.09 (Provisional) a barrel on London's Intercontinental Exchange.

Indian Rupee ended higher against the US dollar on Wednesday after the Reserve Bank of India (RBI) hiked the repo rate by 25 basis points. A rally in the domestic equity markets also supported the rupee. Sentiments were upbeat after Reserve Bank projected India's economic growth at 6.4 per cent for 2023-24, broadly in line with the estimate of the Economic Survey tabled in Parliament last week. Besides, the Reserve Bank projected retail inflation to ease to 5.3 per cent in next fiscal from 6.5 per cent this year on assumptions of lower imported inflation, even though core inflation remains sticky. On the global front, rouble weakened on Wednesday, sliding to a one-month low against the dollar as market demand for foreign currency overpowered government sales, while stocks headed lower on proposals for a one-time windfall tax on big businesses. Finally, the rupee ended at 82.51 (Provisional), stronger by 19 paise from its previous close of 82.70 on Tuesday.

The FIIs as per Wednesday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 7286.08 crore against gross selling of Rs 9492.90 crore, while in the debt segment, the gross purchase was of Rs 1499.57 crore against gross selling of Rs 2323.59 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.15 crore against gross selling of Rs 3.52 crore.

The US markets ended lower on Wednesday paring most of the previous session's strong gains, with tech-focused shares leading the way lower. Asian markets are trading mixed on Thursday as investors assessed further risks of more rate hikes to come. Indian markets ended higher on Wednesday, but off day's highs, as the RBI announced a smaller 25-basis points rate hike and said that domestic banks' exposure to the Adani Group is not very significant. Today, markets are likely to get cautious start amid mixed global cues. Also, there may be some volatility in the markets amid weekly F&O expiry later in the day. Continued selling by foreign investors likely to dampen sentiments in the domestic markets. As per provisional data available on the NSE, foreign institutional investors (FII) sold shares worth Rs 736.82 crore on February 8. There will be some cautiousness with a private report that after delivering the seventh hawkish policy on Wednesday the central bank may pause after delivering a likely 25 basis points increase in the April review. However, some support may come as B B Swain, Secretary to the Union Ministry for Micro, Small and Medium Enterprises (MSMEs), stating that the Centre has acknowledged MSMEs' contribution to the country's economic growth, and the Budget 2023-24 has given a boost to the fund-starved sector with higher credit flow and by simplifying compliances. Meanwhile, SEBI has notified rules asking all market intermediaries and companies to make regulatory payments to it by way of direct credit into the bank account through digital payment systems. There will be some buzz in the railways stocks with report that the Railways has earned more than Rs 600 crore through convenience fee, which it retains from passengers on the cancellation of a ticket, so far in 2022-23. Coal industry stocks will be in focus with report that demand for coal is estimated to reach 1,087 million tonne in the ongoing financial year. As against the increased coal demand, domestic production of the fossil fuel has also increased. There will be some reaction in oil & gas industry stocks with report that India's fuel demand slipped in January after hitting a nine-month peak in December, hit by lower mobility due to cold weather in parts of the country and a slowdown in industrial activity. There are many companies including Hindalco Industries, Hindustan Petroleum Corporation, Life Insurance Corporation of India, Lupin, Zomato, Adani Total Gas, Aurobindo Pharma, Bajaj Consumer Care, Greaves Cotton, Hindustan Aeronautics, Indian Railway Catering and Tourism Corporation, Jet Airways, Page Industries, Suzlon Energy, United Breweries, Ujjivan Financial Services, and Voltas to report their quarterly earning later in the day.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• TCS has expanded its long-standing partnership with Phoenix Group to digitally transform the latter's ReAssure business using the TCS BaNCS based platform.  
• Infosys has entered into strategic collaboration with GE Digital, GE's software division, to accelerate grid transformation for the utilities sector.
• Oil and Natural Gas Corporation is in talks with global oil majors to infuse state of the art technologies in its aggressive exploration push in Deepwaters of India.
• Bharti Airtel has launched its cutting edge 5G services in Surat, Vadodara & Rajkot. Airtel's 5G services are already live in Ahmedabad & Gandhinagar.