Markets to make a flat-to-green start on positive global cues

The Indian markets continued its surge and managed to gain over half a percent in steady last session of trade. Today, the start is likely to be again in green on positive global cues after a more dovish than expected minutes of the US Federal Reserve’s January policy meeting. Today some action can be seen in the banks and jewellery stocks as the Reserve Bank of India (RBI) has permitted banks to resume lending against gold to jewellers. The RBI has also lifted the ban on imports of gold coins and medallions; however the RBI has not permitted banks to sell gold coins across the counter. There will be some buzz in the fertilizers stocks too, as the Oil Ministry has moved a proposal to pool or average out prices of domestic natural gas and imported LNG used by fertilizer plants to make the cost of fuel uniform and affordable. Meanwhile, the metals and power stocks will continue to attract the attention of the traders with aggressive bids by companies in the ongoing coal blocks auctions, States, including Chhattisgarh, Jharkhand and West Bengal, are set to get nearly Rs 60,000 crore from 11 coal blocks sold in the ongoing auction.

The US markets made mostly a negative close in last session, though the tech heavy Nasdaq ended modestly higher but the trade was impacted by the release of the minutes of the Federal Reserve’s January monetary policy meeting, which said that balance of risks associated with policy normalization had inclined them toward keeping interest rates at lower levels for a longer time. The Asian markets have mostly made a good start, though some indices are still not trading today.

Back home, extending their winning streak to sixth straight session, Indian equity benchmarks ended the Wednesday’s trade with a gain of over half a percent. Frontline gauges, after a positive start, traded in tight band throughout the session, while buying in last leg of trade helped frontline gauges to reclaim their crucial 29,300 (Sensex) and 8,850 (Nifty) bastions. Sentiments remained up-beat as market participants indulged in enlarging positions on positive global cues and on hopes of faster economic reforms by the government and optimism over the forthcoming Budget. Some support also came with the government initiative to further ease procedures for seeking permission of the Foreign Investment Promotion Board (FIPB) for foreign direct investment (FDI). Meanwhile, External Affairs Minister Sushma Swaraj said that the government will unveil more reforms in the coming days, including in the forthcoming budget this month to woo foreign investment and make India a manufacturing destination. Traders shrugged off the report of SBI Composite Index, an indicator for tracking India's manufacturing activity, registering a month-on-month decline to 48.3 in February 2015 from 52.1 in January 2015. Global cues too remained supportive with European markets trading in green in early deals, while the Asian markets ended mostly in the green. Back home, domestic institutional investors (DIIs) bought shares worth a net Rs 280.77 crore on February 16 however, foreign portfolio investors sold shares worth a net Rs 182.80 crore during the previous trading session. Meanwhile, defence related stocks remained on buyers’ radar after Prime minister Narendra Modi making a strong pitch for military indigenisation, said that the country's defence industry was at the core of his ‘Make in India’ mission. Prime Minister said even a 20-25 per cent decrease in defence import can create 2 lakh jobs. Also, a 25 percent hike in domestic defence output can create 1 lakh skilled jobs. Finally, the BSE Sensex surged 184.38 points or 0.63% to 29320.26, while the CNX Nifty gained 59.75 points or 0.68% to 8869.10.