Weak global cues to lead a soft start for the domestic markets

The Indian markets moved higher in last session, though the trade remained choppy but surge in metal, capital goods and power stocks helped the indices to close with gain. Today, the start is likely to be a bit soft and the traders will be eyeing the global developments, also the monthly inflation data for December will be eyed, the expectations are that headline inflation probably fell to 7.5 percent year-on-year in December from 9.11 percent in the previous month. There will be buzz in the airlines stock as the government is mulling allowing Private Airlines to import jet fuel or aviation fuel (ATF) directly, though three state-owned oil companies Indian Oil (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum have unanimously opposed the move. IOC has told the petroleum ministry that given the surplus of jet fuel, allowing direct import of this fuel by Kingfisher was not advisable. Meanwhile, Planning Commission has recommended significant and continuous investment in the Indian airline industry as it is expected to suffer a huge debt burden of $20 billion in 2011-12.  Traders will also be eyeing the movement in the Indian rupee after it posted its biggest weekly gain in over two months, aided by robust inflows and upmove in the domestic equities.  Apart from this, there will be some important result announcements to keep the markets buzzing. ING Vysya Bank, Tata Elxsi, South Indian Bank and Dewan Housing will be among the many to announce their numbers.

The US markets closed lower on Friday after the S&P's downgraded many European nations, the worries related to the region remained on forefront, though on domestic front the economic reports were good as the consumer confidence increased. The Asian markets too seem to be worried with the ratings downgrade and have made an all red start with some indices trading lower by over a percent.

Back home, Despite going through a choppy session on Friday, Indian frontline equity markets managed to completely recover the ground lost in the previous session, as they climbed by around three fourth of a percent. The benchmark indices moved closer to the psychological 4,900 (Nifty) and 16,200 (Sensex) levels in the session after largely across the board buying pulled the indices. The Metal, Capital Goods and Power counters led from the front in the session while Reliance ADA group stocks too made their presence felt in the session after stocks like R Power and R Com rocketed by over 7% and 6% respectively. Sentiments remained optimistic on hopes that the government will resort to proactive measures in order to keep the growth momentum going a day after getting the pleasantly surprising November industrial output and weekly food inflation numbers. Meanwhile, the RBI has affirmed that it will consider the declining food prices while taking a view on the monetary policy, which comes up for review later in the month. Investors added positions on hopes of change in RBI’s monetary tightening stance after food inflation remained negative for second straight week. Earlier on Dalal Street, the benchmark got off to an encouraging opening tracking largely sanguine sentiments prevailing in Asian markets. The frontline indices kept losing steam after the good start and drifted to the lowest point in the session by mid morning trades. The road to recovery for the bourses started after getting some support around the previous closing levels. The key gauges kept gaining traction and even flirted with the psychological 4,900 (Nifty) and 16,200 (Sensex) levels. However, some final hour profit booking followed by mild short covering ensured that the key indices settled off the day’s highs. On the BSE sectoral space, the metal counter shone brightly as it remained the top gainer in the space with over three percent gains followed by the beaten down Capital Goods counter which surged close to three percent. On the flipside, Consumer Durable counter remained under moderate pressure while investors also took some profits off the table form Oil & Gas pocket. Finally, the BSE Sensex gained 117.11 points or 0.73% to settle at 16,154.62, while the S&P CNX Nifty climbed by 34.75 points or 0.72% to close at 4,866.