Indian equity markets are poised for a positive start on Thursday, following an overnight rally on Wall Street and a dip in Treasury yields after lower-than-expected core inflation data fueled hopes of at least two interest rate cuts by the US Federal Reserve this year.

Key Highlights to Watch Today:

India's Economic Milestones

• India to Become 4th Largest Economy by 2026: PHDCCI predicts India will surpass Japan to become the world's fourth-largest economy by 2026, with GDP growth forecasted at 6.8% in FY25 and 7.7% in FY26.
• Fiscal Constraints Impact Credit Strength: Moody's noted India's fiscal conditions could limit credit strength through 2025. However, strained US-China relations might benefit India's economy, with domestic demand remaining robust amid easing global financial conditions.

Corporate and Financial Updates

• Foreign Borrowings Decline: Indian companies saw foreign borrowings drop 20.2% to $23.33 billion in 2024, compared to $29.22 billion in 2023.
• Green Investments Surge: CRISIL projects India’s green infrastructure investments to quintuple, reaching ₹31 trillion over the next five years.
• Q3 Earnings in Focus: Major firms, including Infosys, Reliance Industries, and Axis Bank, will release their Q3 results today. Companies like LTIMindtree, Havells, and Waaree Renewable Technologies will also announce earnings.

Trade and Market Dynamics

• Exports Slip in December: India’s merchandise exports contracted by 1% to $38.01 billion in December 2024, while imports rose by 4.8% to $59.95 billion. The trade deficit widened to $21.94 billion.
• FII Outflows Persist: FIIs offloaded shares worth ₹8,132 crore on January 14, marking the largest single-day outflow of 2025.

Market Performance Snapshot

• Domestic Markets End in Green: On Wednesday, the BSE Sensex gained 224.45 points (0.29%) to close at 76,724.08, while the Nifty rose 37.15 points (0.16%) to 23,213.20. Gains in Utilities, Power, and Realty stocks supported the rally.
• Global Markets Rally: US markets advanced on Wednesday after softer inflation data and strong bank earnings. Asian markets followed suit, trading in the green on Thursday.

Currency Movements

• Rupee Gains for Second Day: The Indian rupee appreciated by 12 paise to close at ₹86.40 against the US dollar, supported by strong domestic equities and falling crude oil prices.
• US Dollar and Treasury Yields Dip: The dollar weakened, and Treasury yields retreated after softer US producer price data shifted focus to consumer inflation.

With positive cues from global markets and key economic developments at home, all eyes will be on Q3 earnings and trade data as the markets gear up for another session.