Markets likely to consolidate on sluggish global cues

The Indian markets rally mood continued after an extended weekend and both the bourses surged to their fresh record highs. Today, the start is likely to be slightly cautious and markets may consolidate after the big gains on sluggish global cues. However, traders may get some support with Finance Minister Arun Jaitley, ahead of the Budget, underlining the need for tax reforms and quick decision making to ensure stability in policy regime. He has also expressed confidence that the fiscal deficit target of 4.1 percent of the GDP for the current fiscal would be met. Companies related to services sector are likely to get some boost on report that the government is planning to give incentives to the services sector in the upcoming foreign trade policy and Budget in order to enhance the contribution from the sector. There will be some buzz in the defence manufacturing companies, as a panel has said that India has to raise the foreign direct investment cap in Defence manufacturing to 51 per cent to get US companies to think seriously about investing in the country and share technology.

Lots of important result announcements will keep the markets ticking, Aban Offshore, Adani Ports, Ajanta Pharma, Alstom T&D, Emami, Geometric, Havells, Just Dial, Ranbaxy etc will announce their numbers today.


The US markets suffered sharp sell-off, with the Nasdaq snapping its six-day winning streak. Traders reacted negatively to the weak earnings news from several big-name companies, while a report from the Commerce Department showing a substantial decrease in durable goods orders in the month of December, added to the pressure. The Asian markets have made a mixed start with the Chinese market extending their declining trend for the second straight session, while the Japanese market too has slid on a stronger yen.

Back home, Tuesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around a percent. Sentiments remained jubilant since begining of the trade but hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 29,500 (Sensex) and 8,900 (Nifty) bastions. Sentiments remained up-beat on reports that foreign institutional investors were net buyers in Indian equities worth Rs 2,020 crore on January 23, 2015, as per provisional stock exchange data. Some support also came in with chief economic advisor Arvind Subramanian’s statement that the central bank may further ease the interest rates as improvement on price front has opened the space for monetary easing. Also, Prime Minister Narendra Modi wooing US investors has promised a predictable tax regime. He has also flagged US concerns over trade barriers, intellectual property rights and sought consistency and simplicity in regulatory and tax regime for ease of doing business with India. Some support also came after Finance Minister Arun Jaitley underscored fiscal deficit targets for current year, which was once termed as ‘difficult’ is likely to be achieved. The government has pegged fiscal deficit target at 4.1% of the GDP for the current year. On the global front, European markets made a dismal start, while Asian markets ended mostly in the green. Back home, sentiment was also buoyed by optimism over upcoming Budget and quarterly earnings amid positive domestic factors. Meanwhile, banking stocks continued to remain on buyers’ radar as Reserve Bank is expected to come out with more monetary easing in the coming months if inflation remains in the comfortable zone. Moreover, capital goods shares gained on hopes of order inflows after the breakthrough in the Indo-US treaty for civilian nuclear projects. Finally, the BSE Sensex surged by 292.20 points or 1.00%, to 29571.04, while the CNX Nifty soared by 74.90 points or 0.85% to 8,910.50.