A heavy buying in IT and TECK stocks helped Indian equity markets to garner strong gains on Tuesday, with both Sensex and Nifty ending over half a percent higher. After a positive start, markets witnessed some volatility during early morning deals, amid mixed global cues and hawkish comments from Federal Reserve officials. Some cautiousness came with a private report stating that hiring activity saw a 5 per cent decline in January, while sequentially it was up 3 per cent. The sequential increase was largely due to an improvement in demand for skilled talent in the tourism, telecom, and Banking, Financial Services and Insurance (BFSI) industries. Traders took note of S&P Global Ratings' statement that India's sovereign rating support may strengthen over time if the next government - post general elections - could fund large infra projects without widening the country's current account deficit and can shrink the fiscal deficit significantly. In late morning deals, key indices gained traction and maintained their gaining rally till the end of the trading session, as foreign fund inflows aided domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 518.88 crore on February 5, provisional data from the NSE showed. Traders got encouragement after the Organization for Economic Co-operation and Development (OECD) raised India's growth outlook for 2024-25 (FY25) to 6.2 per cent from the 6.1 per cent estimated earlier in its November outlook. Some support also came in, as according to data from the Central Depository Service and National Securities Depository, the number of demat accounts opened in January totalled over 46.84 lakh, compared to 40.94 lakh a month ago and 21.90 lakh a year ago. The total demat tally crossed 14.39 crore, up 3.4 percent from a month ago and 30.3 percent from a year ago. Finally, the BSE Sensex jumped 454.67 points or 0.63% to 72,186.09 and the CNX Nifty was up by 157.70 points or 0.72% to 21,929.40.

The US markets ended higher on Tuesday as investors scrutinized a mixed bag of earnings at big US companies and digested comments from Federal Reserve policy makers for clues about its first planned interest-rate cut. Minneapolis Fed President Neel Kashkari said the central bank is not done yet with inflation although he noted it had come down quickly with three-month and six-month inflation data basically at the Fed's 2 per cent goal. Also, Cleveland Fed President Loretta Mester said that if the US economy performs as she expects this could open the door to rate cuts. However, Mester said she was not ready yet to suggest timing for easier policy due to inflation uncertainty. Meanwhile, a lack of major U.S. economic data also kept some traders on the sidelines following several key events last week. On the sectoral front, while most of the major sectors showed only modest moves on the day, airline stocks showed a substantial move back to the upside. Reflecting the strength in the sector, the NYSE Arca Airline Index soared by 5.3 percent after plunging by 2.9 percent on Monday. Considerable strength was also visible among oil service stocks, as reflected by the 2.0 percent jump by the Philadelphia Oil Service Index. The strength in the sector came amid an increase by the price of crude oil. Among individual stocks, shares of Palantir Technologies (PLTR) skyrocketed by 30.8 percent after It reported better than expected fourth quarter revenues amid strong demand for its artificial intelligence offerings.

Crude oil futures ended in green on Tuesday on concerns the tensions in the Middle East could cause disruptions to oil supply from the region. Further, the Energy Information Administration's report said that oil inventories may drop by 0.8 million barrels per day in the current quarter contributed significantly to the uptick in oil prices. However, It also lowered its U.S. oil demand forecast to 20.39 million barrels per day from its previous forecast of 20.45 million barrels per day. Benchmark crude oil futures for March delivery surged $0.53 or about 0.73% to settle at $73.31 a barrel on the New York Mercantile Exchange. Brent crude for April delivery rose $0.60 or about 0.77% to $78.59 per barrel on London's Intercontinental Exchange.  

Indian rupee ended lower against the US dollar on Tuesday amid a firm American currency against major currencies overseas. Investors overlooked a report that the Organization for Economic Co-operation and Development (OECD) raised India's growth outlook for 2024-25 (FY25) to 6.2 per cent from the 6.1 per cent estimated earlier in its November outlook. However, positive sentiment in the domestic equity markets and lower global crude prices limited fall in the domestic unit. On the global front, U.S. dollar was up slightly on Tuesday, close to its highest level in almost three months, while the Australian dollar ran out of steam after rising earlier in the session. A string of robust U.S. economic data and remarks from Federal Reserve Chair Jerome Powell have quashed speculation of early and steep interest rate cuts and supported the greenback. Finally, the rupee ended at 83.05 (Provisional), weaker by 2 paise from its previous close of 83.03 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 14560.84 crore against gross selling of Rs 13797.96 crore, while in the debt segment, the gross purchase was of Rs 2679.87 crore with gross sales of Rs 1809.79 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.42 crore against gross selling of Rs 8.83 crore.

The US markets ended in green on Tuesday as investors scrutinized a mixed bag of earnings at big U.S. companies and digested comments from Federal Reserve policy makers for clues about its first planned interest-rate cut. Asian markets are trading mostly higher on Wednesday as investors watched to see if Beijing's increasingly desperate attempts to prop up its collapsing share markets would actually work. Indian markets ended higher on Tuesday aided by buying interest in IT and auto stocks though selling pressure in FMCG counters played spoilsport and limited the upside. Today, markets are likely to extend their previous session's positive momentum with strong opening tracking firm global cues. Traders are likely to keep close eye on the ongoing three-day deliberations of the Reserve Bank of India (RBI) Governor Shaktikanta Das-headed rate-setting panel, amid expectations of continued status quo on short-term lending rates as the retail inflation remains near the higher end of the central bank's comfort zone. For almost a year, the Reserve Bank has kept the short-term lending rate or repo rate stable at 6.5 per cent. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 92.52 crore on February 6, provisional data from the NSE showed. Traders will be taking encouragement as finance minister Nirmala Sitharaman said that retail inflation has come down to within the tolerance band due to steps taken by the government to check price rise in essential commodities, especially in perishable commodities. Some support will also come as Commerce and Industry Minister Piyush Goyal said the government has taken various measures like production-linked incentive schemes and simplified policies to boost investments, trade and promote economic activities in the country. He added India continues to open its economy to global investors by raising FDI limits, removing regulatory barriers, developing infrastructure and improving the business environment. There will be some buzz in energy stocks as Prime Minister Narendra Modi said India will invest $67 billion in the gas sector over the next 5-6 years as part of an unprecedented amount of funds being put in to develop energy infrastructure. FMCG stocks will be in focus with a private report that India's fast-moving consumer goods (FMCG) industry grew 6.4 per cent in volumes in the October-December quarter on the back of positive consumption across the country. The report added value growth in the industry stood at 6 per cent in the quarter. There will be some reaction in aviation industry stocks as the Ministry of Civil Aviation's data showed that the average daily domestic air traffic fell by 4.98 per cent month-on-month (M-o-M) to 423,438 in January. On the other hand, the average daily international air traffic increased by 1.28 per cent M-o-M to 212,479 in January as foreign tourists continue to come amid the peak travel season that is expected to go on till March. Meanwhile, stock-specific action will continue as investors will react to Q3 numbers of Britannia, Nykaa, Nazara Tech and JK Tyre, among others.

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

Nifty Top volumes

• The RBI has given approval to HDFC Bank to acquire aggregate holding of up to 9.50% of the share capital or voting rights in the 6 Banks.
• Sun Pharmaceutical Industries' subsidiary -- Taro Pharmaceutical Industries has incorporated wholly-owned subsidiary company with the name Taro Pharma Corporation, Inc. (USA).
• L&T's construction arm -- L&T construction has won a prestigious project contract for its Transportation Infrastructure Business, to construct the Palashbari to Sualkuchi Cable Stayed Bridge across the river Brahmaputra in Assam.
• Tech Mahindra has been selected as a strategic partner for KWC Group AG, an international premium manufacturer of taps and comprehensive sanitary solutions.