Markets to make a flat-to-cautious start

The Indian markets went for a rally before going for an extended weekend; today the start of the new week is likely to be flat-to-cautious. Traders will now be eyeing the RBI’s bi-monthly monetary policy review slated tomorrow, to get any further cues. Though, Governor Raghuram Rajan is likely to keep rates unchanged but may signal of easing his stance further. Meanwhile, Prime Minister has asked the Reserve Bank to prepare a 20-year road map for financial inclusion and nudged banks to be considerate in giving loans to the poor. There is likely to be buzz in the metals and mining sector stocks on reports that mineral-rich states have identified about 200 mines, including 12 iron ore and 168 limestone blocks, that can be auctioned once the Centre finalises rules for bidding process. Some action can be seen in the power sector stocks too, as the government has extended till June-end short-term supply of coal to power plants, which had lost their mines after the Supreme Court cancelled licences of 204 blocks last year. Apart from the secondary market there will buzz from the primary market too with Adlabs Entertainment’s getting listed today, the issue received a good response and was subscribed 1.11 times.

The US markets made a positive close in last session before going for a long weekend on getting a disappointing jobs report that makes it more likely the Federal Reserve will have to wait until the end of summer before raising a key interest rate for the first time since 2006. The Asian markets have made mostly a positive start, though some of the major markets are not trading today. The traders in the region were concerned about the US monthly jobs data which has raised concerns about a slowdown in the world’s largest economy.

Back home, First day of FY16 turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of over a percentage point. Hectic buying activity which took place during second half of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 28,250 (Sensex) and 8,550 (Nifty) bastions. Earlier, domestic bourses traded listless for first half of the day’s trade near their previous closing levels as sentiments remained dampened on report that core sector growth dipped to a 17-month low in February at 1.4 per cent compared to 1.8 per cent in January, pulled down by contraction in the production of steel, fertilisers and refinery products. However, sentiments took U-turn in later half of the session as market-participants opted to take positions in beaten down but fundamentally strong stocks. Some solace came with report that the government is believed to have met the fiscal deficit target of 4.1 percent of GDP for 2014-15, helped by last minute payment of Rs 10,808 crore by telecom companies for spectrum and tax receipts in March. Positive opening in European counters too supported the sentiments, though the Asian markets ended mostly in the red terrain. 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. Some support came in with reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 356.07 crore, while Domestic institutional investors (DIIs) bought shares worth a net Rs 283.71 crore on Tuesday, as per provisional data. Meanwhile, rally in banking and pharma counters aided the sentiments. Stocks related to infra space too edged higher, as the government has approved amendments to the Public Private Partnerships (PPP) guidelines to enhance financial support to projects in infrastructure sector. Finally, the BSE Sensex soared by 302.65 points or 1.08% to 28260.14, while the CNX Nifty surged by 95.25 points or 1.12% to 8,586.25.Markets remained closed on Thursday and Friday.