The Indian markets showed a scintillating performance in last session, totally coming out of the Budget woes as the latest measure of Reserve Bank of India showed that the government is serious about revival of the beaten down sectors. Today, the start is likely to be modestly in green and the markets will keep their momentum going on supportive global cues. Traders will also be getting some support with report that heavy showers have narrowed the monsoon deficit to 36 percent, accelerating crop planting. The weather office has forecast more rains in the days ahead. There will be some buzz in the export oriented stocks, as Federation of Indian Exports Organisations (FIEO) has said that export momentum is likely to continue in the coming months on the back of higher demand helped by an uptick in global economies and measures announced in the Union Budget. PSU oil marketing companies too will be in action on reports that losses on sale of diesel have fallen by nearly a rupee to Rs 2.49 per litre as international oil rates have moderated. In the ongoing result season traders will be eyeing the important numbers of IT bellwether Tata Consultancy Services (TCS). The company is likely to report modest decline in net profit on QoQ, weighed down by impact of salary increases and appreciation of rupee.
There will be some other important result announcements too, to keep the markets in action. Bajaj Auto, Bajaj Holdings, D B Corp, Gruh Finance, Mindtree and Rallis India will be announcing their numbers.
The US markets regained their momentum after a day of consolidation and moved up with the Dow reaching a new record high. Though, the economic news remained mixed but traders took cues from better than expected Chinese economic data and some upbeat earnings announcements. The Asian markets have made mostly a positive start with some of the indices on course for the longest winning streak in more than a month, led by material and industrial shares.
Back home, Wednesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around a percentage point. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 25,500 (Sensex) and 7,600 (Nifty) bastions. Earlier, markets made a gap-up opening but investors booked some of their profits in noon deals after June trade deficit hit an 11-month high. However, India’s exports in June rose 10.22 percent from a year earlier, helped by a pick-up in external demand and a weak currency. Overall, sentiments remained up-beat after India’s services exports in May rose by 8.8 percent to $13.9 billion. Import of services during the month, however, rose in double-digit of 15 percent to $8.03 billion. Sentiments also were buttressed after reports suggested Met officials expect steady rains for the rest of July, particularly in the parched regions of central and northwest India, which should somewhat ease worries over inflation, water scarcity and a sub-par kharif crop. Buying got intensified in last leg of trade after European counters made a firm opening, supported by reassurance that the US Federal Reserve is in no hurry to raise interest rates. Asian markets too ended mostly in the green. Back home, Rally in shares of real estate and infrastructure companies too aided the sentiments after the Reserve Bank of India (RBI) said banks would not have to maintain cash reserve ratio (CRR) or statutory liquidity ratio (SLR) and will not have to meet priority-sector lending targets for funds raised through bonds for extending credit to these sectors. Metal and mining stocks gained for the third day in a row after the latest data showed that China's GDP growth accelerated to 7.5% in Q2 June 2014, from 7.4% in Q1 March 2014. Banking stocks rallied for yet another session on rate cut hopes. Moreover, better than expected Q1 numbers from Kotak Mahindra Bank and Federal Bank too supported the up-move in banking stocks. Finally, the BSE Sensex surged by 321.07 points or 1.27%, to 25549.72, while the CNX Nifty soared by 97.75 points or 1.30%, to 7,624.40.
