Markets likely to make positive start; RIL’s numbers eyed

The Indian markets rallied over two and half a percent in last session as RBI Governor Raghuram Rajan unexpectedly cut the repo rate by 25 basis points to 7.75% from 8%. Today, the start is likely to be good, though some cautiousness will be witnessed later in the day as global remained dismal. Traders will be first reacting to the TCS earnings, announced late evening. The company’s net profit grew 2.94 percent sequentially to Rs 5,444 crore, aided by other income. Traders will also be eying Reliance Industries (RIL) Q3 numbers, to be announced later in the day. The company is expected to post its first drop in net profit in six quarters as inventory losses due to a fall in crude oil prices weigh on profitability and take away the benefits of higher gross refining margins (GRMs) in the fiscal third quarter. The markets will be getting some support from reports that trade deficit for December 2014 stood at 10-month low with further hope that imports will continue to decline. Trade deficit during December fell sharply to $9 billion from $16.8 billion in November 2014. While exports for the month came in at $25.40 billion from $25.96 billion in November, imports declined to $34.83 billion from $42.82 billion in the previous month. There will be some action in the rate sensitive counters after RBI cut the repo rate. There will be some buzz in the banking stocks after the RBI has said banks may become insurance brokers and sell multiple products, though this is not mandatory.

There will be some important result announcements too, to keep the markets ticking. Axis Bank, DHFL, Force Motors, NIIT, Wipro, Oberoi Realty, V- Guard Industries are among the many to report their numbers.

The US markets ended lower in last session as investors reacted negatively to quarterly results from financial giants Bank of America (BAC) and Citigroup. The Asian markets have made mostly a soft start after Switzerland’s unexpected move to abandon its currency cap jolted markets already roiled by plunging commodities prices.

Boisterous benchmarks showcased an enthusiastic performance on Thursday, by rallying over two and a half percentage points, led by financials on expectations that further easing of interest rates would help spur growth. Sentiments remained up-beat since start as key bourses opened with a huge gap on up-side 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 stocks. Frontline indices not only ended the session near intraday high levels but also recaptured their crucial 8,450 (Nifty) and 28,000 (Sensex) bastions as investors took to hefty across the board buying. Sentiments remained jubilant after the Reserve Bank of India (RBI) Governor Raghuram Rajan unexpectedly cut the repo rate by 25 basis points to 7.75% from 8%. Meanwhile, the cash reserve ratio (CRR) has been kept unchanged at 4% of net demand and time liabilities (NDTL) while the reverse repo rate stands adjusted to 6.75%. Some support also came after United Nations (UN) in its report said that the Indian economy is likely to expand by 6.4 per cent this year, driving the economic growth in South Asia. The progress in implementing much-needed structural reforms was likely to boost the country’s economic performance in 2015. Meanwhile, Finance Ministry’s Chief Economic Adviser Arvind Subramanian said that prospects for the Indian economy look ‘very bright’ with the remarkable turnaround witnessed in recent months on the back of lower current account deficit and the slew of reforms unleashed by the new government. On the global front, European shares were trading in the red as Switzerland’s central bank ended its minimum exchange rate policy that was meant to keep the euro from falling below 1.20 Swiss francs. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Appreciation in Indian rupee too supported the sentiments. Finally, the BSE Sensex surged by 728.73 points or 2.66%, to 28075.55, while the CNX Nifty soared by 216.60 points or 2.62% to 8,494.15.