Markets to make a soft start after a long weekend

Indian markets had consolidated before going for a long weekend; today the start of the new week is likely to be soft-to-cautious taking cues from the weak global cues. Traders will be a bit more cautious with an Assocham’s post-Budget survey of CEOs and CFOs, where majority of them have said that they find revised GDP data of over 7 percent growth as “too good to be realistic” and too optimistic since the underlying situation is not all that upbeat. The telecom stocks will keep buzzing, as the bidding for spectrum by the telecom operators reached Rs 86,000 crore on the fourth day of the auction, surpassing the government’s revenue expectation of Rs 82,000 crore. The metals and power stocks too will remain in action with government’s cumulative proceeds surging to Rs 1.57 lakh crore from the ongoing auction of coal mines. There will be some cheer in the export oriented stocks, as the Commerce and Industry Minister Nirmala Sitharaman has said that the government is planning to form a committee to tackle issues related to exporters as well as boosting outward shipments.

The US markets ended lower in last session on concern that Fed may increase the interest rate earlier than expected following the release of upbeat US employment data. The Asian markets have made mostly a soft start tailing the weakness in US markets. Japanese market was lower as the nation’s revised fourth-quarter gross domestic product rose less than estimated, while the  Chinese market was down despite its Exports gaining more than 48 percent from a year earlier in February.

Back home, buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks managed to keep their head above water on Thursday. Markets traded choppy throughout the session as investors remained on sidelines ahead of the US job data, due tomorrow amid a long weekend. The markets are closed on Friday for Holi, followed by the regular weekend holidays. Some support came in on the back of reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 2786.24 crore on Wednesday, as per provisional data. Sentiments also got some support after global rating agency Moody's underscored that the new ‘inflation targeting’ mechanism is a ‘credit positive’ development and it would make RBI's monetary policy tools much more effective. However, gains remained capped on report that Reserve Bank of India (RBI) has cautioned that the uncertainty surrounding global oil prices can have an adverse bearing on the inflation outlook, though it will endeavour to bring it down to the target of 4 percent by 2016-17. On the global front, European markets traded higher in early deals, while Asian markets ended mostly in the red. Back home, appreciation in Indian rupee too supported the sentiments. Meanwhile, shares of insurance companies advanced after the Lok Sabha passed the Insurance Laws (Amendment) Bill, 2015, that proposes to raise the foreign investment cap to 49% from 26% in the insurance sector. Additionally, Public sector oil marketing companies (PSU OMCs) advanced after the Ministry of Petroleum & Natural Gas announced that 81% active LPG consumers (11.74 crore) have joined the Direct Benefit Transfer for LPG (DBTL) scheme called PAHAL as on March 2, 2015. Finally, the BSE Sensex gained 68.22 points or 0.23% to 29448.95, while the CNX Nifty added 15.10 points or 0.17% to 8,937.75.