Indian equity benchmarks extended their losses to the fourth day on Wednesday, as weak global markets, a mixed set of Q3 earnings and selling by foreign institutional investors (FIIs) dented the domestic market mood in today's session. Besides, investors chose to book profits ahead of the Union Budget on Monday, February 1. Markets made pessimistic start, as sentiments remained down-beat with the latest round of FICCI's Economic Outlook Survey stated that India's gross domestic product (GDP) is expected to contract by 8 per cent in current financial year (FY21). The annual median growth forecast by the industry body is based on responses from leading economists representing industry, banking and financial services sector. Some concern also came with Reserve Bank data showing that overseas investment by domestic firms fell by over 42 per cent to $1.45 billion in December 2020. In the year-ago period, companies in India had invested $2.51 billion in their foreign firms (joint ventures / wholly-owned units). Key indices continued to show a sluggish trend in second half of the session, as the UN has said that India's economy is projected to grow at 7.3 per cent in 2021, even as it is estimated to contract by 9.6 per cent in 2020 as lockdowns and other efforts to control the COVID-19 pandemic slashed domestic consumption. The World Economic Situation and Prospects 2021, produced by the United Nations Department of Economic and Social Affairs (UN DESA), said the world economy was hit by a once-in-a-century crisis - a Great Disruption unleashed by the COVID-19 pandemic in 2020. Market participants also took a note of IMF Chief Kristalina Georgieva's statement that all hands are needed on deck, be it businesses, governments or even central banks, for a sustainable and balanced recovery. Finally, the BSE Sensex fell 937.66 points or 1.94% to 47,409.93, while the CNX Nifty was down by 271.40 points or 1.91% to 13,967.50.

The US markets ended deeply in red on Wednesday, extending their previous session's losses  as traders finally seemed to be paying attention to concerns about the impact of new, more contagious coronavirus strains along with uncertainty about the prospects for a new relief package. Traders were also worried about recent speculative trading by retail investors amid continued spikes by heavily shorted stocks like GameStop and AMC Entertainment. Markets saw further downside in late-day trading following the Federal Reserve's first monetary policy announcement of the New Year. The Fed left interest rates unchanged as widely expected and revealed it plans to maintain its asset purchase program at the current pace. Trades have been disappointed the central bank did not provide additional clarity about the outlook for its bond purchases. The Fed's statement reiterated the assertion first made last month, when the Fed said it will maintain asset purchases at the current rate until substantial further progress has been made toward its goals of maximum employment and price stability. On the economic data front a report released by the Commerce Department showed new orders for manufactured durable goods rose by much less than expected in the month of December. The Commerce Department said durable goods orders edged up by 0.2 percent in December after surging by an upwardly revised 1.2 percent in November. Street had expected durable goods orders to increase by 0.9 percent compared to the 1.0 percent jump that had been reported for the previous month.

Crude oil futures ended higher on Wednesday after official data showed a substantial drop in US crude stockpiles in the week ended January 22. According to the data released by the Energy Information Administration, crude inventories in the US fell by 9.9 million barrels last week, dropping to 476.7 million barrels. The numbers compared to street's expectation for a build of 430,000 barrels. Despite the sharp drop in inventories, persisting worries about the surge in coronavirus cases and tighter restrictions on movement in several parts across the world continue to cause uncertainty about near-term energy demand. Crude oil futures for March rose $0.24 or 0.5 percent to settle at $52.85 barrel on the New York Mercantile Exchange. March Brent crude gained $0.34 to settle at $56.25 a barrel on London's Intercontinental Exchange.

Continuing gaining rally, Indian rupee strengthened marginally against dollar on Wednesday, owing to dollar sale by exporters and banks. Sentiments were positive as International Monetary Fund (IMF) has projected an impressive 11.5 percent growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth in 2021, amidst the coronavirus pandemic. However, upside remain capped as Reserve Bank data showing that overseas investment by domestic firms fell by over 42 per cent to $1.45 billion in December 2020. In the year-ago period, companies in India had invested $2.51 billion in their foreign firms (joint ventures / wholly-owned units). On the global front, dollar edged higher against a basket of currencies on Wednesday as markets waited for comments from Federal Reserve Chair Jerome Powell, who is likely to renew a commitment to ultra-easy policy. Finally, the rupee ended at 72.92, 2 paise stronger from its previous close of 72.94 on Monday.

The FIIs as per Wednesday's data were net buyer in both equity segment and debt segment. In equity segment, the gross buying was of Rs 9465.25 crore against gross selling of Rs 9168.48 crore, while in the debt segment, the gross purchase was of Rs 828.08 crore with gross sales of Rs 425.17 crore. Besides, in the hybrid segment, the gross buying was of Rs 46.90 crore against gross selling of Rs 42.79 crore.

The US markets ended lower on Wednesday after the latest Fed statement as major indexes were also pressured by a slump in Boeing and a selling of long positions by hedge funds. Asian markets are trading in red on Thursday following a sharp Wall Street decline amid deepening concerns about stretched valuations in equities markets, while the dollar and bonds strengthened. Indian benchmark indices, Sensex and Nifty, ended almost 2 percent lower on Wednesday dragged by heavy selling across the key sectors. Today, the markets are likely to make gap-down opening tracking sell-off in global markets. Investors will be concerned as India recorded 11,752 fresh cases of the coronavirus disease (Covid-19). The caseload tally stands at 10,702,031. Globally, more than 101.4 million people have been infected by the virus. The country continues to be second-most-affected globally, and ranks 14th among worst-hit nations by active cases. The five most affected states by total cases are Maharashtra (2,013,353), Karnataka (936,955), Kerala (899,932), Andhra Pradesh (887,238), and Tamil Nadu (835,803). However, traders may take encouragement with report that Gita Gopinath, the Chief Economist of the International Monetary Fund (IMF), said that India has entered 2021 with better prospects than what was expected last year and has been able to restore activity faster than many economies. Some support may come with the Ministry of Commerce and Industry's statement that foreign direct investment (FDI) inflows from April to November 2020 have increased by 22 percent (YoY) to $58.37 billion - the highest for the first 8 months of any fiscal. Traders may take note of report that the Ministry of Home Affairs eased several restrictions imposed due to the spread of COVID-19. From increasing the capacity of cinema halls and theatres; allowing swimming for all to the opening of international air travel passengers, the Home Ministry will prepare standard operating procedures (SOPs) in consultation with the concerned ministry, states, and union territories. The new order would be effective from February 1 and would remain in force till February 28. Meanwhile, The Finance Ministry has released Rs 12,351 crore to 18 states for providing grants to the rural local bodies. This amount is the second instalment of basic grants released in the financial year 2020-21. Agriculture industry stocks will be in focus with IMF's Chief Economist Gita Gopinath's statement that India's recently-enacted agri laws have the potential to increase farmers' income, but there is a need to provide a social safety net to the vulnerable cultivators. There will be some reaction in aviation industry stocks with report that the Ministry of Civil aviation has further extended the ban on all flights between Indian and UK till February 14. This was done to prevent the spread of the new strain of coronavirus going around in the UK. There will be lots of earnings reaction to keep the markets buzzing.

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

Nifty Top volumes

• L&T has reported a rise of 4.87% in its consolidated net profit attributed to the shareholders at Rs 2,466.71 crore for Q3FY21 as compared to Rs 2,352.12 crore for Q3FY20. 
• TCS has consolidated its position among the Top 3 most valuable brands in the IT services sector according to Brand Finance, the world's leading brand valuation firm. 
• GAIL (India) is planning to launch an InvIT of its two gas pipelines between Dahej and Bengaluru ahead of a proposed splitting of the pipeline business from the gas marketing function. 
• HCL Technologies has collaborated with University of California, Berkeley to create a Health Technology Collaborative Laboratory housed in the Blum Center for Developing Economies on the university's campus in Berkeley, California.