Markets to extend gains with a positive start

The Indian markets bounced back and snapped their losing streak in last session with gains of around a percent. Today, the start is likely to be in green though traders will be reacting to the macro data announced late last evening, while retail inflation rose to 5.37 percent in February, the third consecutive month of uptick, the industrial output grew by modest 2.6 percent in January, diminishing hopes of another rate cut by the Reserve Bank. There will be some support to the market with India and Mauritius agreeing to fast-track the long-pending revision of Double Taxation Avoidance Agreement (DTAA) to prevent abuse of the convention. Insurance stocks will keep buzzing with the passing of much-anticipated insurance bill in the Rajya Sabha. Export-import oriented stocks too will be in action with the government reducing the number of mandatory documents required for import and export of goods to three in each.

The US markets ended sharply higher in last session, though Commerce Department said retail sales slid in February for the third straight month, but it made the dollar weak and supported the markets. Traders also reacted positively to news that the Fed gave several major banks approval to launch capital repurchase programs and dividend increases. The Asian markets have mostly made a positive start, after an unexpected drop in American retail sales strengthened the case for keeping interest rates lower for longer.

Back home, snapping three days losing streak, Indian equity benchmarks staged an enthusiastic performance on Thursday, by rallying around 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. Sentiments remained up-beat after the International Monetary Fund (IMF) in its annual assessment report for the India has raised its growth forecast for the current fiscal to 7.2 percent. Moreover, global rating agency Moody’s has retained India’s stable outlook on the sovereign rating at Baa3, citing the country's large and diversified economy and healthy private savings rate. Some support also came in with the statement of Revenue Secretary that the GST rollout is on track. He has also said that the roadmap for the removal of corporate tax exemptions announced in the Union Budget are also set to be announced during the course of this year. Meanwhile, Indirect tax revenue (provisional) collections have increased to Rs 4,78,630 crore during April-February 2014-15, an increase of 7.4 percent over the corresponding period in the previous fiscal. On the global front, European counters were traded mostly in the red in early deals, however, 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 Sensex recapturing its crucial 28,900 bastion, while Nifty ended near its crucial 8,800 mark. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 62.55 at the time of equity markets closing as compared to Wednesday’s close of 62.78, tracking gains in domestic equity markets. Finally, the BSE Sensex surged by 271.24 points or 0.95% to 28930.41, while the CNX Nifty soared by 76.05 points or 0.87% to 8,776.00.