Markets to extend the gains with a green start

The Indian markets were on the peak of their jubilation in last session with both the major indices posting triple digit gains, bolstered by the US Fed’s pledge to retain rates at low levels and on hopes that foreign funds would continue to flow into India. Markets maintained their uptrend throughout the session and no profit booking was visible for the day. Today, the start is likely to be in green tailing the positive global cues. Traders will be getting some support with Finance Secretary Arvind Mayaram’s statement that India is following economic growth inducing policies and is confident that the GDP will rebound to over 7 percent in 2-3 years. The oil & gas stocks are likely to keep buzzing with the Supreme Court asking the new government to make its stand clear on fixation of the price for gas from Krishna-Godavri basin as to whether it sticks to the previous government’s dispensation’s policy or making any departure from it. Textile stocks too are likely to see some action, as the Textiles Minister Santosh Gangwar has approved setting up of 13 textile parks, entailing minimum investment of Rs 100 crore each. There will be some negative reaction from the pharma space with the National Pharmaceutical Pricing Authority bringing prices of 43 essential medicines to treat diseases like tuberculosis or heart ailments under a control regime.

The US markets extended their gains in last session with Dow and the S&P 500 surging to new record closing highs on easing concerns about the outlook for interest rates following yesterday's Fed statement. The Asian markets have made an all green start on signs of US economic strength. The Japanese market has once again taken the lead and was up by over a percent in early deals as the yen plunged.

Back home, Indian equity benchmarks staged an enthusiastic performance on Thursday, by rallying over one and a half percentage points and breaking lots of psychological levels in their northward journey. Sentiments, after a cautious start, turned positive and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength, supported by sustained foreign capital inflows. US Federal Reserve’s decision to keep interest rates near zero for a considerable time has mainly boosted the confidence of the market participants. Sentiments also got bolstered on optimism that trade ties with China would attract foreign inflows and revive country's economic growth. Some support also came after the Reserve Bank of India eased foreign direct investment (FDI) norms allowing companies to issue equity shares to a resident outside India against any type of fund subject to certain conditions. Buying got intensified in last leg of trade as European counters made a firm start, while Asian markets too ended mostly in the green led by Japanese market which surged over a percent toward a six-year high on a weaker yen. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline indices managed to settle near intraday high levels with Sensex and Nifty surpassing their crucial 27,100 and 8,100 bastions. Rally in oil and gas counters too supported the sentiments as the four-member committee of secretaries has submitted its report on a new gas pricing mechanism, prescribing a rate much lower than the doubling of price approved by previous UPA government. Meanwhile, shares of real estate companies rallied on reports that the Real Estate (Regulation and Development) Bill, 2013 is likely to come up for consideration in Rajya Sabha in the forthcoming Winter Session. Finally, the BSE Sensex surged by 480.92 points or 1.81%, to 27112.21, while the CNX Nifty gained 139.25 points or 1.75% to 8,114.75.