Markets to make a green start on improving global sentiments

The Indian markets showed some fatigue in last session before going for a holiday. Today, the start is likely to be in green on improved global sentiments and traders will be taking cues with the government initiative to further ease procedures for seeking permission of the Foreign Investment Promotion Board (FIPB) for foreign direct investment (FDI). Though, there will be some cautiousness too, as the SBI Composite Index, an indicator for tracking India's manufacturing activity, has registered a month-on-month decline in February to 48.3 in February 2015 from 52.1 in January 2015. The telecom stocks are likely to be in action, with depositing of earnest money for the spectrum auction of next month by different players. Signaling an aggressive play Reliance Jio has submitted Rs 4,500 crore, while Bharti Airtel has deposited Rs 4,336 crore. There will be some buzz in the metals, mining and power stocks, as the Finance Minister Arun Jaitley has said that the ongoing auction of coal mines would help in ensuring cheaper electricity to the common man in a sustained manner as against the practice of states subsidising power.

The US markets coming out of initial weakness, ended modestly higher in last session, though stocks showed a lack of direction throughout much of the trading day. But traders were hopeful that Greece will eventually reach an agreement with its eurozone creditors. The Asian markets have made a green start with some of the indices trading higher by over half a percent in early deals after Bank of Japan kept its monetary policy unchanged as expected.

Back home, extending their northward journey for fifth straight session, Indian equity benchmarks ended the Monday’s trade with modest gains. Earlier, markets traded firmly for most part of the trade as sentiments remained up-beat on reports that foreign institutional investors bought equities worth Rs 390 crore on Friday, as per provisional stock exchange data. Some support also came 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. Investors’ confidence got boost after annual rate of inflation, based on monthly wholesale price index (WPI) ebbed way below street expectation at -0.39% in January as compared to 0.11% in December on the back of sharp correction in oil prices. However, markets wiped-out most of their early gains in the dying hour of trade, mainly on the back of subdued start of European equities, while profit-booking by participants ahead of holiday also weighed on the sentiment. Markets remained shut on Tuesday.i.e. February 17 on account of ‘Mahashivratri’. On the global front, European markets made a weak start, though Asian markets ended mostly in the green. Back home, investors seemed more hopeful of faster reforms in the government’s 2015/16 fiscal budget due on February 28 after the Prime Minister Narendra Modi-led Bharatiya Janata Party was routed in Delhi state elections. In positive news, there was report that overseas investors have pumped in over Rs 10,000 crore in Indian capital markets in the first two weeks of this month. Meanwhile, select stocks from metal space edged higher 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. Finally, the BSE Sensex rose 40.95 points or 0.14% to 29135.88, while the CNX Nifty gained 3.85 points or 0.04% to 8809.35.