Markets to make a flat-to-cautious start

The Indian markets continued their surge and despite some choppiness, ended at record closing high in last session. Today, the start is likely to be flat-to-cautious and the markets may see some consolidation after their continued rally. However, traders will be getting some support from positive comments of World Bank chief, who has  expressed confidence that with the Narendra Modi-led Government at the Centre, India’s ranking in ‘Doing Business’ can improve significantly. The Bank also said it would lend $15-18 billion over the next three years. Traders will be eyeing the Union Cabinet considering key economic reform legislations to raise foreign direct investment in insurance and empower SEBI to act against ponzi and illegal deposit schemes. There will be some action in companies related to DTH business, as the regulator Trai has recommended extension of licence period of direct-to-home (DTH) operators from 10 years to 20 years, while proposing bringing down fees to 8% of the adjusted gross revenue. There will be some buzz in the debt markets too, as the Reserve Bank of India has increased the FII limit for investment in government securities by $5 billion within the total cap of $30 billion, to be put in government bonds with a minimum residual maturity of three years.

There will be lots of important result announcements too, to keep the markets buzzing. ACC, Ambuja Cements, Bayer Crop, Biocon, Glenmark Pharma, Jindal Saw, Mahindra & Mahindra Finance, Mastek, Pfizer, State Bank BikJpr, TVS Motor, Wipro and Zensar Tech are among many to announce their numbers today.

The US markets made a mixed closing in last session amid lingering concerns about the ongoing conflicts in Ukraine and Gaza. Though earnings remained in focus and tech heavy Nasdaq ended in green on notable advance in shares of Apple. The Asian markets have mostly made a green start, after a Chinese manufacturing gauge rose to its strongest reading in 18 months. Japanese market too was modestly in green despite country’s trade deficit coming larger than estimated.

Back home, boisterous benchmarks once again showcased an enthusiastic performance, whereby domestic bourses once giving impression of a red close, bounced-back smartly, and rallied around half a percent. Frontline indices not only extended their rally for seventh straight session but also recorded their all time closing high levels, amid renewed buying interest in software and technology majors. After a gap-up opening, key indices entered into red terrain couple of time in afternoon trades as investors booked profit at higher levels, but every bout of selling pressure was reciprocated with recovery and markets managed to end the session near intraday highs. Overall, sentiments remained up-beat on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 412.03 crore on July 22, 2014, as per provisional data from the stock exchanges. Some support also came after the Reserve Bank of India (RBI) has relaxed Rs 1-lakh ceiling on loans for non-agricultural purposes against gold jewellery. Borrowers can now pledge their gold and get a higher value of loans, provided that the loan-to-value (LTV) ratio does not exceed 75% of the cost of the gold. Buying got intensified in last leg of trade as European counters made a decent recovery after a sluggish start, while the Asian markets too ended mostly in the green. Back home, frontline indices managed to settle near all time closing high levels with Sensex surpassing its crucial 26,100 mark, while Nifty ended near its crucial 7,800 bastion, as investors took to hefty across the board buying. Appreciation in Indian rupee too aided the sentiments. Meanwhile, rally in software and banking counters too supported the sentiments, boosted by positive economic data in US, the biggest outsourcing market for the Indian IT firms. Stocks related to banking space like, Bank of Baroda, Punjab National Bank, SBI and ICICI Bank edged higher, as the RBI will start announcing the names of systemically important banks (D-SIBs) by August 2015. Finally, the BSE Sensex surged by 121.53 points or 0.47%, to 26147.33, while the CNX Nifty gained 27.90 points or 0.36%, to 7,795.75.