Markets to make a jubilant start on euphoric global cues

The Indian markets sensed the global mood early and surged around half a percent in last session; today the start of the penultimate session of the F&O series expiry is likely to remain good on euphoric global cues. There is likely to be buzz from the political circles with the Supreme Court ordering the government to give it the entire list of the black money account holders. There will be some cautiousness with a latest World Bank’s “Ease of Doing Business” report, where India has been placed at 142 among 189 countries, a drop by two places from the last year’s ranking. There will be buzz in the banking sector too with global ratings agency Standard & Poor’s warning that gross non-performing assets (NPAs) of Indian banks are likely to rise to 4.5 per cent by the end of March 2015 from 4 per cent in the previous year. Realty and construction stocks are likely to be in action today, as the Cabinet may on decide on relaxing foreign direct investment (FDI) norms in construction sector. There will be lots of result announcements too, to keep the markets buzzing.

The US markets went for a rally in last session supported by some good earnings and better than expected economic data, as there was a notable improvement in consumer confidence in the month of October. The Asian markets have made a jubilant start tailing the rally in the US peers, ahead of a Federal Reserve policy announcement.

Back home, resuming their northward journey, Indian equity benchmarks ended Tuesday’s trade with a gain of around half a percent with frontline gauges recapturing their crucial 8,000 (Nifty) and 26,850 (Sensex) levels. Markets traded with caution in first half but gained momentum in the afternoon and closed near day’s high on the back of positive cues from European peers. Sentiments remained up-beat on report that foreign institutional investors (FIIs) were net buyers to the tune of around Rs 49.14 crore on October 27, 2014. Some support also came with a World Bank report saying that India’s GDP is likely to expand by 5.6 per cent this fiscal as reforms gain momentum and the growth is expected to accelerate as proposed measures such as GST will give a boost to manufacturing sector. World Bank has also said that implementation of the goods and service tax (GST) is the most critical reform needed for Indian manufacturing. Buying got intensified after European markets made a positive opening as better-than-expected results from a number of blue-chips including Novartis and UBS helped lift sentiment, though Asian equity indices ended mixed. Back home, investors remained confident on report that private equity investments during July-September quarter of current fiscal grew by 47 percent to $3.1 billion over the corresponding period last year. According to the report prepared by advisory firm Grant Thornton, PE investments in India amounted to $3.12 billion through 157 deals in the reported quarter, while in the corresponding period last year there were 115 such transactions worth $2.12 billion. Meanwhile, pharmaceutical stocks rallied on the back of impressive second quarter earnings from Lupin and Ranbaxy. On consolidated basis, Lupin’s net profit for the quarter under review registered 55.11% growth at Rs 630.04 crore against Rs 406.18 crore in the September quarter of previous fiscal, while Ranbaxy posted a net profit of Rs 477.76 crore for the quarter as against a net loss of Rs 454.17 crore in the September quarter of previous fiscal. Finally, the BSE Sensex surged by 127.92 points or 0.48%, to 26880.82, while the CNX Nifty gained 35.90 points or 0.45% to 8,027.60.