Markets likely to start on a cautious note on subdued global cues

The Indian markets staged a smart recovery in late hours of trade in last session and managed to outperform all its Asian and European counterparts by the end. The supportive global cues and encouraging earnings announcements lead to the recovery in late trade. Today, the markets are likely to start on a cautious note as sentiments across Asia appear subdued since European leaders held back a bailout for Greece. Investors will also be keenly awaiting the Indian industrial production (IIP) numbers which economists at large expect to expand at 2.7% versus 5.9%, on month-on-month basis. Meanwhile, the external affairs ministry has opposed any amendment to the Indo-Mauritius tax treaty as any removal of the capital gains exemption could hurt India geo-political interests in Mauritius. Investors will keep a close eye on index heavyweight Reliance Industries after its $1bn bond issue was 8 times over- subscribed with an order book aggregating $7.8 bn. Also Tata Steel will remain in investors’ focus in the session after it registered an unexpected quarterly loss in third quarter while ADA group stocks like R Com and R Capital are likely to announce their third quarter earnings later in the session.

Apart from this there will be lots of scrip specific actions to keep the markets buzzing. Apollo Hospital, Aurobindo Pharma, Great Eastern Shipping, Essar Oil, DLF, IDFC,  JSW Steel, Pantaloon Retail, Pipavav Defence, Sun TV Network, Tata Chemicals, Tata Power and Shriram Transport Finance are among the many to announce their numbers today.

The US markets managed to snap yet another session with marginal gains and furthered the gaining streak for third straight session on Thursday. The headway in Greece along with better than expected weekly jobless claims data prevented the downfall for the markets there. The Asian markets though are not showing any kind of enthusiasm and are trading on a sedate note as the deal in Greece failed to convince investors in the region while European finance ministers too have demanded more steps and a parliamentary seal of approval before providing the aid. Barring two indices which are trading with marginal gains, all other indices in Asia are trading on a weak note.

Back home, after squandering for most part of the session around the previous closing levels, the domestic benchmark equity indices staged a smart comeback in the last leg of trade and snapped Thursday’s session with about a percent gains. In its northbound journey, the 50-share Nifty not only extended its gaining streak for second straight session but also retraced the psychological 5,400 levels, which were last seen only on August 3, 2011. The frontline indices have vivaciously rallied close to twenty percentage points since the lows hit in December 2011 and have even outperformed most major markets across the globe thanks to the relentless buying by foreign funds who have poured in $3.6 billion in local equities so far this year. A day after being outclassed by the global markets, the frontline indices smartly bounced back in the session and across the board hefty position build up, helped the gauges to outperform all its Asian as well as European counterparts. Sentiments got support after global rating agency Fitch affirmed that India is facing cyclical slowdown rather than a structural downturn. Fitch stated that this may further ease inflation, which appears to have passed its peak and thereby giving room to RBI to move to a more accommodative monetary policy, after recent increases in policy rates. On the earnings front, heavyweight Hindaclo succeeded in trimming a large part of its losses in the session after announcing third quarter earnings numbers, which were not as bad as the street had expected. Also stocks like Apollo Tyres and Ambuja Cements got commended for reporting encouraging quarterly results. Earlier on the Dalal Street, the benchmark got off to a negative opening as the indices drifted lower since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. After trading with moderate cuts through the morning session, the lethargic equity indices gradually crawled sideways without any fervor through the afternoon trades. However, a sudden revival in sentiments was witnessed in the last leg of trade as stocks from Metal and Banking counters rebounded to provide the much needed support. Eventually the benchmarks managed to regain the key 5,400 (Nifty) and 17,800 (Sensex) levels and snap the session around high point of the day. On the BSE sectoral space, Metal counter remained top gainer in the space with gains of two percent while the rate sensitive Realty and Bankex sectors too finished with handsome gains. Finally, the BSE Sensex gained 123.43 points or 0.70% to settle at 17,830.75, while the S&P CNX Nifty rose by 44.20 points or 0.82% to close at 5,412.35.

The US markets closed higher for a third day in a row on Thursday, as Greek politicians agreed on austerity plans needed to qualify for international aid and US jobless claims decreased. In Athens, Greek Prime Minister Lucas Papademos stated that the government’s talks with international creditors had concluded successfully. This program accompanies the new loan agreement to finance Greece with 130 billion euros. In US, the Labor Department’s count of Americans filing initial claims for jobless benefits dropped by 15,000 last week to 358,000. The four-week moving average fell to 366,250, its lowest since April 2008. The Dow Jones Industrial Average closed higher by 6.51 points, or 0.05 percent, at 12,890.50. The S&P 500 was up by 1.99 points, or 0.15 percent, at 1,351.95, while the Nasdaq closed up 11.37 points, or 0.39 percent, at 2,927.23.

Crude oil prices soared over a percent and extended the winning streak for third straight session on Thursday as investors cheered the Greek agreement on new austerity cuts demanded by its international creditors to release a 130 billion euro bailout. The oil prices also got a lift after encouraging US jobs data spurred optimism since initial jobless claims fell 15,000 to 358,000, brightening labor market picture. The depreciation in American Greenback to a fresh two month low against the euro on the back of Greek deal too aided sentiments. Benchmark crude for March delivery surged $1.13 or 1.14% to settle at $99.84 a barrel after trading as high as $100.18 as low as 98.66 a barrel on the New York Mercantile Exchange. In London, March delivery Brent crude jumped $1.39 or 1.2% to end at $118.59 a barrel.