Markets to make a good start on outlook upgrade by Moody’s

The Indian markets gained momentum in second half and added over half a percent gains to close at a three-week highs in last session. Today, the start is likely to be good on sanguine global cues and positive development from the macro front, as the Moody's Investors Service has changed India’s outlook to positive from stable. Though, the country’s Baa3 rating (the lowest investment grade) was affirmed but the outlook was revised from stable on increasing probability that actions by policymakers will enhance the country’s economic strength and, in turn, the sovereign’s financial strength over coming years. Meanwhile, the Chief Economic Adviser Arvind Subramanian has said that big bang reforms are not applicable to a country like India as there was multiple veto centres, multiple decision making centres and was very difficult to pass through a decisive change. There will be some buzz in the power sector stocks, as Power Minister Piyush Goyal has said that the transmission and distribution sector can expect private sector investments of nearly Rs 300,000 crore over the next four years. The mining and mineral stocks too will be in action, as the government has proposed a two-stage bidding process to the states for auctioning major minerals like iron ore.

The US markets ended modestly in green after a choppy trade, reacting to the minutes of the Federal Reserve’s March meeting, which indicated that officials are divided over when to begin raising interest rates.  The Asian markets have made mostly a positive start taking cues from the US markets and led by the Hang Seng Index, which briefly touched the highest level since 2007. Japanese market too was trading up on weakness in yen against dollar.

Back home, extending their northward journey, Indian equity benchmarks ended the Wednesday’s session with a gain of over half a percent with key gauges recapturing their crucial 28,700 (Sensex) and 8,700 (Nifty) levels. Sentiments remained up-beat since beginning of the trade and benchmarks managed to fervently gain from strength to strength to end near intraday high levels as investors continued hunt for fundamentally strong but oversold stocks. Rally in resources stocks such as Coal India and Reliance Industries mainly aided the sentiments. Some support also came with a survey sponsored by RBI projecting the economic growth rate at 7.9 percent for the current fiscal, up from 7.5 percent in 2014-15. The forecasters expect real GVA to increase by 7.5 percent in 2014-15. Also, NITI Aayog vice-chairman Arvind Panagariya has said that nothing has-changed-on the-ground though the economy is showing signs of turnaround. Panagariya also said that it will take some time before major results show up as there is a new government which came with a lot of promises. On the global front, European counters made a positive opening, while the Asian markets ended mixed. 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. Meanwhile, none of the sectoral indices were trading in the red, barring banking, while software and technology witnessed the maximum gain in trade. Metal, oil and gas, fast moving consumer goods, realty, consumer durables and public sector undertakings too were trading significantly. Meanwhile, rally in real estate stocks too aided the sentiments as the government approved changes to a Bill that seeks to regulate the country's property market. The bill is aimed to protect the interest of consumers from errant developers and ensure timely execution of projects. Finally, the BSE Sensex surged by 191.16 points or 0.67% to 28707.75, while the CNX Nifty soared by 54.10 points or 0.62% to 8,714.40.