Indian markets could open higher in line with positive Asian markets today and higher US markets on Tuesday, said Deepak Jasani, Head-Retail, HDFC Securities.
Prashant Tapse, Vice President (Research), Mehta Equities, said, "Firm SGX Nifty is indicating a gap-up start on backdrop of a strong overnight close at Wall Street. Factors such as the Chinese central bank moving to loosen monetary policy and fears around the Omicron Covid-19 variant easing can help boost the domestic market sentiment. An early boost could take Nifty to its biggest hurdles at 17,489 mark. Above the same, a brighter trading week is quite likely as the buying madness will be on display that could drive Nifty towards the psychological 18,000 mark."
Nifty reversed the losses of the previous day on December 7 and posted the biggest single day gain since September 23, 2021. At close Nifty was up 1.56 percent or 264 points to 17,176.7.
Nifty clawed back most of the losses of the previous day on December 7. 16,983 could now be the support for the Nifty while 17,401 could be the resistance. The way the advance decline ratio has improved suggests a few more days of upward moves in the Nifty, though the pace could slow.
Asian shares extend gains
Asian shares extended gains on Wednesday, continuing a global relief rally as markets found positive news in early reports about the potential impact of the Omicron variant.
US stocks close higher
US stock benchmarks closed higher Tuesday, with a surge extending Monday’s sharp gains, as Wall Street focused on early reports that the omicron variant of coronavirus that causes COVID-19 is less severe than originally feared.
A lot of the fear over the omicron variant of the coronavirus is waning and investors see in recent data that “there is still a lot of economic momentum” in the US British drugmaker GSK said an antibody-based COVID-19 therapy it is developing with Vir Biotechnology was effective against all mutations of the Omicron variant.
US trade deficit sinks almost 18% in October
The US trade deficit sank almost 18 percent in October after the biggest surge in exports in 13 years and a slowdown in imports partly tied to congestion at domestic ports. The trade gap shrank to $67.1 billion from a record $81.4 billion in the prior month.
RBI policy today
The RBI policy statement is due today, with the central bank widely expected to stand pat on key rates as the Omicron variant poses risks to India's recovery.
Abheek Barua, Chief Economist, HDFC Bank said the RBI policy meeting on December 8,comes against the backdrop of uncertainty around the Omicron virus on the one hand and the US Fed continuing to sound hawkish and markets pricing in accelerated tightening globally on the other. "In our base case, we continue to see a high probability of a reverse repo rate hike by the RBI in December, especially in light of 1) increasing inflationary concerns and signs of growth picking up (Q2 GDP at 8.4 percent) and 2) some normalisation (liquidity and rates) since the October policy that has already been underway. That said, we recognise the risk of the Omicron virus putting a brief pause to/or caution towards normalisation plans by the RBI but at this stage we do not think they will be jettisoned completely."
China's exports lose steam
China's exports growth lost steam in November, pressured by a strong yuan, weakening demand and higher costs, but imports unexpectedly accelerated as the country scrambled to restock depleted commodities like coal. Exports rose 22 percent year-on-year in November, customs data showed on Tuesday, slower than the 27.1 percent jump in the previous month but faster than the 19.0 percent expected in a Reuters poll. Imports climbed 31.7 percent, beating the 19.8 percent rise in October and well above the forecast 20.6 percent gain.
Japan's economy shrinks
Japan's economy shrank 3.6 percent in the third quarter, worse than the initial estimate of a 3.0 percent contraction, revised government data showed on Wednesday, posting a decline as private spending took a hit from a resurgence in COVID-19.
