Domestic markets likely to get a slightly soft start

The Indian markets extended their jubilation for one more day on Friday and surged to their 11 week high on getting good earnings number and on report that the inflation continue to remain in negative territory. Today, the start of the new week is likely to be a bit soft-to-cautious, the global cues are not looking supportive and there is not much on the domestic front too. Though, the E&Y has said that foreign direct investment in India is set to swell in coming years, but on the same time a CII survey has said that the confidence level of Indian businessmen dipped in the October-December period as stagnant or declining investments and sales in shaky global economy hit operations. The Business Confidence Index shed 5 points in the period, adding up to a cumulative decline of 18 points after the past quarter of 2010-11. Sugar stocks are likely to remain in upbeat mood after the prime minister constituted a 7 member Expert Committee under the Chairmanship of Dr. C. Rangarajan, Chairman Economic Advisory Council to the Prime Minister, to examine issues relating to the sugar sector.The Committee will look into all the issues relating to de-regulation of the sugar sector and it has been requested to complete its task as early as possible and give its recommendations to the Prime Minister.

There will be lots of result announcements to keep the markets buzzing, Balrampur Chini, EID Parry, Glenmark Pharma, Indian Bank, Novartis India, Mcleod Russel, LIC Housing Finance and United Phosphorus are among the many to announce their numbers today.

The US markets made a mixed closing on Friday; the investors’ mood got dampened by the lower than expected economic growth data, though it was for the first time larger than it was before the recession. The Asian markets have made a mixed start and some of the indices after a long break are trading in red ahead of a European summit on the region’s debt crisis and after the US economy expanded less than forecast in the fourth quarter. European Union leaders gather in Brussels today for their first summit of 2012.

Back home, first day of a fresh futures and options series brought more cheer for the Indian stock markets as the benchmark indices not only climbed around a percent higher in the session but also jumped to the highest levels in eleven weeks, re-tracing the psychological 5,200 (Nifty) and 17,200 (Sensex) levels. Coming in the session after the Republic Day holiday, the benchmarks failed to capitalize on the initial gap up opening but steadily gained ground after drifting to intraday lows in the late morning session. The psychological 5,150 (Nifty) and 17,100 (Sensex) levels proved as strong supports as the frontline gauges got a technical bounce from those levels thanks to hefty position build up in heavyweights like Reliance Industries and L&T. Sentiment got a boost after encouraging weekly inflation data showed that food inflation hovered in the negative terrain for the fourth successive week as it moderated to (-) 1.03% by week ended January 14, 2012. Moreover, foreign funds, which have been showing renewed interest in the fundamentally strong but deeply undervalued Indian equities, have infused more than $1.5 billion in local markets in January, in sharp contrast to net outflows of about $500 million in 2011. Meanwhile all sugar stocks including Bajaj Hindusthan, Shree Renuka and Balrampur Chini rallied sharply on reports that Prime Minister Manmohan Singh has formed expert committee to examine issues concerning the sugar industry and also to consider deregulation of the sector. Earlier on Dalal Street, the benchmark got off to a gap up start tracking the supportive leads from Asian markets. The indices jumped to the highest point in the session in initial moments of trade but soon slipped to lower levels. However, profit booking gathered momentum in late morning trades which dragged the gauges to lowest point in the session. But the frontline indices treaded on the road to recovery after hitting session’s lows and the upward journey only ended with the day’s close around the high point of the day. On the BSE sectoral front, largely across the board buying was evident with the Oil & Gas counter leading the space with 2.69% gains. The Consumer Durables and TECk counters too went home with over 2% gains each. On the flipside, the high beta Realty sector plummeted over two percent, being the top laggard in the sectoral space followed by the defensive FMCG index which plunged about a percent. Finally, the BSE Sensex rose 156.80 points or 0.92% to settle at 17,233.98, while the S&P CNX Nifty up by 46.40 points or 0.90% to close at 5,204.70.