Markets to rebound with a green start of the new week

The Indian markets continuing their somberness made a flat closing in last session, extreme volatility was witnessed on the first day of the new F&O series. Today, the start of the holiday truncated week is likely to be in green, tailing the positive global cues. There will be buzz in the India Inc and the banking stocks, as the Reserve Bank of India (RBI) has proposed to lower the ceiling on how much a bank can lend to a single corporate group, in a move to curb risks in the banking sector at a time when bad loans are on the rise. There will be some cautiousness too, as the global ratings agency Standard and Poor's has said that capital spending in India is likely to take 12 more months to start recovering as private companies have adopted a ‘Wait-And-See’ approach. Export oriented stocks will be in action, as the much-delayed foreign trade policy (FTP) is set to be unveiled on April 1. The policy is likely to be incentive-based and reward the high quality, globally-competitive exports besides ensuring that the free trade pacts India has entered into with several countries are fully utilised by the exporters.

The US markets ended higher in last session led by some late-day buying interest. Traders reacted positively to the remarks by Federal Reserve Chair Janet Yellen that an interest rate hike may well be warranted later this year but stressed that any increase in interest rates would be gradual. The Asian markets have made green start with some indices trading higher by over a percent. Japanese market too was up by about half a percent despite the nation’s industrial production falling more than forecast in February. Output declined 3.4 percent from January, weakest since June last year.

Back home, Indian equity benchmarks witnessed consolidation with the key gauges ending mixed on Friday. Markets traded choppy throughout the session as investors opted to remain on sidelines in absence for fresh triggers. However, recovery in last leg of trade helped markets to end flat. Some support came in with reports that domestic institutional investors (DIIs) bought shares worth a net Rs 687.09 crore on Thursday. Meanwhile, the government has lowered the price of domestically produced natural gas by over 10% to $5.02 per mmBtu from $5.6 per unit, the first ever reduction in the rates of the fuel. The new price will be effective from April 1. However, traders remained cautious with the Yemen related tensions in the Middle East, which has led to spike in oil prices amid inflation worries after some unseasonal rains in different parts of the country which could dampen the further rate cut hopes from RBI. Sentiments also weighed down on report that, foreign portfolio investors (FPIs) sold shares worth a net Rs 521.23 crore yesterday, as per provisional data. On the global front, European markets traded higher in early deals, while Asian markets ended mostly lower on Friday. Back home, appreciation in Indian rupee provided some support to the markets. The partially convertible rupee was trading at 62.58 per dollar at the time of equity market closing against the Thursday’s close of 62.67 on the Interbank Foreign Exchange. Buying in software counter too aided sentiments. Stocks like Infosys and Tata Consultancy Services (TCS) edged higher after global consulting major Accenture Plc raised its full-year revenue growth forecast for the current year. Finally, the BSE Sensex gained 1.06 points to 27458.64, while the CNX Nifty lost 0.75 points or 0.01% to 8,341.40.