Markets to make a flat-to-positive start

The Indian markets surged in last session reclaiming their lost crucial psychological levels. Today, the start is likely to be good and the markets may extend their gains of last week. Meanwhile, it has been reported that to boost manufacturing growth under 'Make in India' programme, industry leaders and top government officials have suggested duty cuts, easier land acquisition norms and fiscal incentives for research and development especially in sectors like defence. There is likely to be buzz in the public sector banks on reports that the government may consider merging weak smaller public sector banks, and nudge bigger ones to consolidate to create big and strong global banks in India. Power companies engaged in renewable solar power are likely to see some action as the Prime Minister Narendra Modi has ramped up his target for solar energy as he bets on renewables to help meet rising power demand and overcome the frequent outages.

The US markets made a flat closing in last session on getting weak manufacturing data and decline in outlays for US construction projects. The Asian markets have made a mixed start with the Japanese market making a negative beginning of the New Year on global growth concern, although Japanese manufacturing activity showed sustained growth in December.

Back home, extending their winning streak to sixth straight session, Indian equity benchmarks staged an enthusiastic performance on Friday, by rallying around one and a half percentage points and breaking lots of psychological levels in their northward rally. Sentiments remained positive since beginning of the trade and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Sentiments also remained up-beat on reports that foreign institutional investors were net buyers in Indian equities worth Rs 18.20 crore January 1, 2015, as per provisional stock exchange data. Some support came in as the Finance Ministry is 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. Sentiment got a boost after Indian manufacturing activity expanded at its fastest pace in two years in December as new orders, both from home and from abroad, flooded in and as factories kept price increases to a minimum. The HSBC India Purchasing Managers' Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, climbed to two year high at 54.5 in December, up from 53.3 in the prior month. On the global front, European counters made somber start and fell into negative territory in early deals after data revealed that the euro zone manufacturing sector ended 2014 on a subdued note. 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 ending near their crucial 27,900 (Sensex) and 8,400 (Nifty) levels. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 63.28 at the time of equity markets closing as compared to Thursday’s close of 63.35, tracking gains in domestic equity markets. Finally, the BSE Sensex surged by 380.36 points or 1.38%, to 27887.90, while the CNX Nifty soared by 111.45 points or 1.35% to 8,395.45.