Markets to make a positive start ahead of PMI numbers

The Indian markets after a low volume trade managed a flat closing in last session. Today, the start is likely to be in green and traders will be eyeing the PMI numbers and will be getting some support with the Finance Ministry expecting an improvement in the fiscal position in January-March quarter on a likely pick up in tax revenue realisation, receipts from spectrum auction and stake sale of PSUs. Oil and infra companies are likely to be in limelight today, as the government hiked the excise duty on petrol and diesel by Rs 2 per litre. Retail price of petrol and diesel will remain unchanged allover India despite additional excise duty. Government has further stated that the decision has been taken in order to fund the ambitious infrastructure development programme of the government, particularly the building of 15,000 km of roads, during current and next financial year. The increase is expected to generate nearly Rs 10,500 crore annually. Banking and telecom stocks too will be in action on report that banks and telecom companies are among those looking to be joint stakeholders in the payment bank institutions that the Reserve Bank of India envisages as playing a critical role in the country’s financial inclusion project. Power stocks too will see some upmove on report that coal stock position at thermal power plants showed improvement last month as compared to November, with 41 projects under the critical category.

The US markets remained closed on the first trading day of the year, unable to give any cues to the other global markets. The Asian markets too are not trading in full, but the ones who are trading have made mostly a positive start of the New Year.

Back home, buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks managed to keep their head above water on first day of 2015. Markets traded choppy throughout the session as investors remained cautious on mixed set of economic indicators, while the Central Government’s fiscal deficit for the April-November period touched 99 per cent of the Budget estimate for 2014-15, on the other, Core sector output grew at its fastest in five months in November, backed by the robust performance of coal, electricity and cement sectors. Core Sector grew by 6.7% from a year ago and faster than October’s 6.3%.  Buying in last leg of trade helped benchmarks to end in green terrain as investors went for beaten down but fundamentally strong stocks. Sentiments got some boost from report that foreign institutional investors were net buyers in Indian equities to the tune of $16.07 billion in calendar year 2014 till December 30, 2014. However, the absence of foreign investors restricted up-side, while the domestic institutions too remained in holiday mood.  Asian markets remained closed for the day, while the weakness in the US markets overnight weighed on the sentiments. Back home, rally in metal counter aided the sentiments. Stocks like, Sesa Sterlite, Hindalco and Tata Steel edged higher after growth in China's services sector picked up slightly in December. Telecom shares too remained on buyers’ radar after the Telecom Regulatory Authority of India (Trai) on Wednesday recommended a base price of Rs 2,720 crore a megahertz (MHz) for 2,100-MHz spectrum across the country (22 telecom zones). The price is about 22 per cent lower than the reserve price of the same spectrum in the previous auction, conducted in 2010. Additionally, stocks related to aviation sector edged higher after oil marketing companies (OMCs) reduced aviation turbine fuel (ATF) price for sixth succeeding month in January 2015 by sharp 12.5%. ATF price were reduced for sixth straight month to a cumulative 34% till date. Finally, the BSE Sensex gained 8.12 points or 0.03%, to 27507.54, while the CNX Nifty added 1.30 points or 0.02% to 8,284.00.