Markets to make a positive start of the new week

The Indian markets extending their bull run surged in last session and both the major indices added gains of about a percent. Today, the start of the new week is likely to be in green on supportive global cues; however traders will be eyeing the WPI inflation data for January, slated to be announced later in the day. After a modest rise in CPI inflation based on new series, the WPI numbers too are likely to increase marginally as compared to 0.11% recorded in the month of December. Traders are likely to get some support with Prime Minister Narendra Modi assuring more reforms while rolling out the red carpet to investors, especially the multinationals, inviting them to make use of the large pool of highly talented youth in the country. There is likely to be buzz in the metal sector stocks, as the government received about 130 initial bids from Essar, Hindalco and Adani Power and others for 21 ready-to-mine coal blocks on the Schedule 3 of blocks on offer. There will be some buzz in the PSU oil marketing companies too, as petrol price has been hiked by 82 paisa per litre and diesel by 61 paisa, the first increase since August 2014 and follows firming of oil prices in the international market. There will be lots of result reactions too, for the numbers announced during the weekend to keep the markets in action.

The US markets made a modestly positive closing in last session supported by some upbeat economic news from Europe and rise in crude oil prices, although the consumer sentiments suffered sharp decline in February. The Asian markets have made mostly a positive start with the Japanese market surging to an eight year high after data showed that the economy emerged from recession in the final quarter of last year.

Back home, extending their rally for fourth straight session, Indian equity benchmarks staged an enthusiastic performance on Friday, by rallying over a percentage point 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. Some support also came in with the government stating that it has collected Rs 4.27 lakh crore, or 68.6 percent of budget target for indirect tax, in the April-January period of this fiscal. The budget target for indirect tax collections is Rs 6.23 lakh crore. Meanwhile, retail inflation inched up in January but hovered within the central bank’s comfort levels. CPI inflation with changed base year came at 5.1% in January, compared to previous month’s 4.3%. On the other hand, the Index of Industrial Production (IIP) growth was subdued at 1.7% year on year (yoy) in December compared with 3.9% in November on slow growth in mining and electricity segments. Global cues too remained supportive with European counters making a firm start, while the Asian markets ended mostly in the green. 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 Nifty surpassing its crucial 8,800 bastion, while Sensex ended near its crucial 29,100 mark. Recovery in Indian rupee too supported the sentiments. Rally in shares of pharmaceutical companies too supported the sentiments after reporting a good set of numbers for the quarter ended December 2014 and expectation of strong export growth backed by better regulatory compliance track record and patent expiry. Finally, the BSE Sensex surged by 289.83 points or 1.01% to 29094.93, while the CNX Nifty gained 93.95 points or 1.08% to 8805.50.