Markets to extend gains with a positive start

The Indian markets despite choppiness extended their gains in last session, supported by outlook upgrade by Moody’s. Today, the start is likely to be in green and the markets will add gains on the back of positive domestic macro environment. After Moody’s, another global credit rating agency Fitch retained India's credit outlook at ‘stable’ saying although “dynamism” is back in the economy, translation of reforms into higher growth would depend upon actual implementation. It has also raised its forecasts for real GDP growth to 8 percent for current financial year and further to 8.3 percent in 2016-17. Meanwhile, with rating agencies Fitch and Moody's affirming India's credit outlook as “stable” and “positive” respectively, industry body Ficci has said that the move will uplift investor sentiment and help attract foreign investments. In other positive development, Paris-based think tank Organisation for Economic Cooperation and Development (OECD) has said that India’s economic expansion continues to firm up even as growth is easing in the neighbouring China. There will be some buzz in the aviation stocks on reports that new civil aviation policy is likely to be unveiled by the Government before May 15. Telecom stocks too will remain in action with Telecom Regulatory Authority of India (Trai) slashing ceiling tariffs for roaming calls, effective May 1.

The US markets made a positive close in last session despite choppy trading, mainly on the back of good gains in energy sector stocks. Though, Labor Department reported a rebound in initial jobless claims in the week ended April 4th. The Asian markets have made mixed start with some of the indices heading towards the second weekly advance, though Hong Kong market was witnessing some profit booking in early deals after going through two straight days of frenzied buying.

Back home, Thursday’s session turned out to be a fabulous day of trade for the Indian equity markets with frontline gauges recapturing their crucial 28,850 (Sensex) and 8,750 (Nifty) levels respectively. Buying activity which took place during last leg of trade mainly drove the markets higher and benchmarks ended the session near intraday high levels, extending their rally for fifty straight session. Overall, sentiments remained up-beat on reports that 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. Some support also came with reports that India’s summer monsoon rains are expected to be normal this year. Monsoon rains are vital for India’s farm sector, which accounts for 14 per cent of the $2 trillion economy, as half of the country's farmland lacks irrigation. Weak monsoon rains have cut farm output in the past, stoking inflation. Buying got intensified as European counters made a firm start, however, Asian markets ended mostly in the red. Back home, appreciation in Indian rupee too supported the sentiments. Rally in banking shares too aided the sentiments after Moody's Investors Service changed India's outlook to 'positive' from 'stable' earlier and affirmed 'Baa3' credit rating. On the flip side, healthcare stocks edged lower on profit-booking activities a day after the government has allowed pharmaceutical companies for hiking prices of 509 essential medicines used for treating various diseases like diabetes, hepatitis and cancer by 3.84% with effect from April 1. Finally, the BSE Sensex surged by 177.46 points or 0.62% to 28885.21, while the CNX Nifty soared by 63.90 points or 0.73% to 8,778.30.