Markets likely to make a flat-to-positive start on supportive global cues

The Indian markets closed with moderate cuts in last session on unsupportive global leads and weak GDP growth advance estimates numbers. But, some gains in heavyweights in Oil & Gas and Banking counters prevented sharp sell-off in the markets. Today, the start is likely to be flat-to-positive as sentiments may get support from optimistic cues from Asian markets and overnight US markets. But all eyes will be set on Greece and developments on that front will influence the direction of the local markets in second half. Meanwhile, steel and iron ore companies have some good news to cheer as a Supreme Court panel has recommended for cancellation of 123 iron ore leases, which would be up for grab for steel companies. Stocks of sugar and rice companies too are likely to rally in the session after the EGoM approved export of one million tonnes of sugar. It also okayed further export of non-basmati rice up to 4 million tonnes and reduction of MEP (minimum export price) of basmati rice to $700 a tonne from $900 a tonne. Index heavyweight Reliance Industries will also be in focus as the oil ministry is making a fresh attempt to financially penalize the company for the fall in natural gas output from the D6 block even as it wants to avoid arbitration over the same issue. Apart from this there will be lots of scrip specific actions to keep the markets buzzing while investors will keep a close eye on Bharti Airtel and ONGC ahead of their quarterly results which will be out later today.

Also there will be many other earnings announcements to keep the markets buzzing. Bharat Forge, JSW Ispat, Jubilant FoodWorks, Kalpataru Power, Tech Mahindra, Shyam Telecom, Orchid Chemical and Power Grid Corporation are among the many to announce their numbers today.

The US markets managed a green close on Tuesday and recovered the ground lost in previous session amid choppy trades. The encouraging US credit card debt numbers which surged for second month in a row during December along with Fed Chairman’s pledge to prevent Europe's debt crisis from hurting the US economy, helped the markets rise higher. All Asian markets have got off to a positive opening amid increasing hopes that Greece may make the tough choice of accepting painful reforms in return for a new international bailout to avert a chaotic default.

Back home, after showcasing smart performances in the recent past, Indian frontline equity indices slipped lower in Tuesday’s session and registered its first negative close in last six sessions. The benchmarks failed to extend five session gaining momentum as investors lacked conviction to take larger bets after the recent sharp rally in equities. Sluggish global cues kept domestic market participants cautious, leading the frontline indices to move in a tight range for most part of the day. Meanwhile, government data showed India’s gross domestic product (GDP) growth for the fiscal year 2011-2012 would be 6.9% which is a tad less than the widely expected figure of around 7%. The psychological 17,800 (Sensex) and 5,400 (Nifty) levels proved as stern resistances as the key gauges witnessed hefty bouts of profit booking at higher levels which dragged the indices below the neutral line. Profit booking was largely evident in the Capital Goods and high beta - Realty counters which plunged over two percent after registering solid gains in the recent past. Stocks from Aviation pocket including Kingfisher Airlines, Jet Airways and Spice Jet skyrocketed in the range of 10-15% in the session after the empowered group of ministers gave their green signal to the decision to allow airlines to directly import Air Turbine Fuel from abroad. Earlier on Dalal Street, the benchmark got off to an encouraging opening tracking the leads from Asian markets. Thereafter, the bourses traded on a positive note and climbed to the highest point in the session in mid morning trades. However, the indices witnessed some stern resistance around key technical levels and got pushed closer to the neutral line. However, the pessimistic leads from European markets in the mid noon trades spooked sentiments and dragged the frontline indices to the lowest levels in the session. Eventually the markets closed with moderate cuts and snapped the five session uptrend. On the BSE sectoral space, Oil & Gas counter remained top gainer in the space with gains of about a percent while the Consumer Durables and Bankex sectors finished with over half a percent gains. Finally, the BSE Sensex lost 84.86 points or 0.48% to settle at 17,622.45, while the S&P CNX Nifty declined by 26.50 points or 0.49% to close at 5,335.15.

The US markets rose on Monday, sending the Dow industrials to their highest close since 2008, as Greece’s government made progress on measures to secure international aid. Also, a Labor Department report had job openings rising to 3.38 million in December from 3.12 million the month before, showing continued progress in the labor market. In Athens, government officials reportedly have a draft deal to present to Greek party leaders on Wednesday detailing another bailout. Greece’s government and international creditors are working on the final draft of an agreement on budget and structural measures needed to free up a second aid package, a Greek official stated. Prime Minister Lucas Papademos plans to convene the nation’s political leaders meet to seek consensus on the required measures, as unions called a strike to protest and European leaders pressed Greece to reach a deal. The Dow Jones Industrial Average closed higher by 33.07 points, or 0.26 percent, at 12,878.20. The S&P 500 was up by 2.72 points, or 0.20 percent, at 1,347.05, while the Nasdaq closed up 2.09 points, or 0.07 percent, at 2,904.08.

Crude prices rallied around one and half a percent on Tuesday as supply side concerns perked up after reports of two to three week shutdown in Alberta plant that processes Canadian oil sands, which also helped in reducing the Nymex crude’s discount to Brent crude. The fuel prices also got underpinned after the depreciation in American greenback against the euro on hopes that Greece would agree to a bailout deal with the European Union and the International Monetary Fund. Meanwhile, widening of sanctions over Iran’s ambitious nuclear weapons program also resulted in buyers of Iranian crude in Asia and Europe scrambling to look for alternate supplies. Benchmark crude for March delivery surged $1.50 or 1.5% to settle at $98.41 a barrel after trading as high as $99.13 as low as 95.97 a barrel on the New York Mercantile Exchange. In London, March delivery Brent crude rose $0.30 to $116.23 a barrel.