Markets to continue the northbound journey with a positive start

The Indian markets despite some choppiness managed to extend their gains for the fifth straight session last day, supported by some better than expected earnings and fund buying. Today the start is likely to remain in green, as the regional markets are in jubilant mood. The power sector stocks will be in action, as amid fuel shortages, power producers have been advised to import 54 million tonnes (MT) of coal in the current fiscal. It has been reported that one fourth of the 100 coal-based power plants monitored by CEA are reeling under acute coal shortage with stocks to last less than four days. Iron and steel stocks too are likely to see some action, as the government has stated that iron ore production in the country is sufficient to meet the domestic demand and steel makers are not facing any shortage of the key input.

Meanwhile, traders lacking any important macro data announcements will be eyeing some important result announcements. Asian Paints, Axis Bank, Ceat, Dish TV India, Hexaware Technology, ING Vysya Bank, Tata Coffee and Thermax will be announcing their numbers.

The US markets despite late hour recovery ended modestly lower in last session, mainly due to geopolitical concerns, as the worries about further sanctions against Russia generated some negative sentiment. Most of the Asian markets have made a green start with some of the indices once again moving towards a six-year high, reached earlier this month. Japanese market after a long weekend has taken the lead on weakness in yen.

Back home, extending their northward journey for fifth straight session, Indian equity benchmarks ended the session in the green amid encouraging first quarter earnings from index heavyweights Reliance Industries and HDFC. Some support also came after Finance Minister Arun Jaitley exuded confidence that tax collection during the current fiscal would exceed budget estimate of Rs 13.64 lakh crore. After a gap-up opening, markets started drifting lower to end near intraday low as market-participants booked profits at higher levels. Nevertheless, it was a broadly positive session of trade, wherein broader indices outperformed the benchmark indices with the Small-cap index gaining nearly 1 percent on report that foreign institutional investors turned focus to the broader markets where valuations are seen reasonable at current levels. Foreign institutional investors (FIIs) who have pumped over $12 billion (Rs 70,276 crore) in Indian equities year-till-date (YTD), have increased their stake in more than 150 mid-and small-sized companies during the April - June 2014 quarter. On the global front, European markets made a sluggish start, while most Asian stock markets edged higher. Back home, RIL’s standalone net profit for the first quarter stood at Rs 5,649 crore, 5.5 per cent higher from the corresponding period a year ago, backed by lower interest and depreciation costs along with slightly better refining margins. The consolidated net profit rose 13.7 per cent to Rs 5,957 crore. While, HDFC reported 9.71% rise in its consolidated net profit at Rs 1872.90 crore for the quarter as compared to Rs 1707.10 crore for the same quarter in the previous year. Telecom stocks like Bharti Airtel, Idea Cellular and Reliance Communication too remained on buyers’ radar, on report that the telecom regulator is likely to propose allowing operators share all kinds of airwaves - including those administratively allotted. On the flip side, PSU oil marketing companies viz HPCL and IOC edged lower, as the Petroleum Minister Dharmendra Pradhan has once again said that cooking gas and kerosene prices will not be hiked; however he said that the petrol prices would move according to the prevalent market price mechanism. Finally, the BSE Sensex gained 73.61 points or 0.29%, to 25715.17, while the CNX Nifty added 20.30 points or 0.26%, to 7,684.20.