Markets to extend the last session gains on supportive global cues

The Indian markets made a marvelous turnaround in the final hours of last session to snap their five days losing streak, with both the major indices posting gains of over half a percent. Today, the start is likely to be in green on sanguine global cues. Traders will also be getting some support with Finance Minister Arun Jaitley’s statement that the government will move the Constitution Amendment Bill in Parliament within a couple of days. Meanwhile, the industry body CII has said that the Land Bill introduced in Parliament will create millions of jobs, meet the aspirations of farmers, and help spur growth in the economy. However, the prediction of sub-normal monsoon by the Indian Meteorological Department this year is likely to weigh on the sentiments. According to IMD, the probability of a deficient monsoon is 33% and the probability of below-normal monsoon is 35%. Effectively, there is a 68% probability of a weak monsoon.  Infra sector will be in focus, as the government has approved three highway projects which would cost an estimated Rs 5,529 crore.

The US markets made a positive close in last session despite some early volatility with the tech-heavy Nasdaq reaching its best closing level since 2000, reacting positively to earnings news from some big-name companies. The Asian markets have made mostly a positive start and some of the indices are trading higher by around a percent in early deals. The Chinese market too was trading in green although the HSBC flash manufacturing PMI of the country slipped to one year low at 49.2.

Back home, snapping their five days losing streak, Indian equity benchmarks ended the volatile day of trade with a gain of over three fourth of a percent on Wednesday. Markets opened higher and remained rangebound during the first half of the trading session only to fall sharply in late noon trades, spooked by a weak monsoon forecast. The first forecast of Monsoon rains, released today by Indian Meteorological Department (IMD), predicted that the rainfall during the season may fall below normal adding to the worries over the possible build-up of an El Nino condition in South Asian region threatening severe to moderate disruption of rains. However, hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending near intraday high levels, recapturing their crucial 27,850 (Sensex) and 8,400 (Nifty) bastions. Domestic sentiment was propped up on value-buying in blue-chips after five straight session of losses. Some support also came in with reports that Finance Minister Arun Jaitley will meet his state counterparts to discuss the roadmap for rolling out Goods and Services Tax (GST) from April 2016. Later, the state ministers will discuss amongst themselves various issues relating to the implementation of the new indirect regime. On the global front, European markets made a sluggish start as investors looked to Greece’s debt crisis, while Asian equity indices ended mixed. Back home, rally in metals counter supported the sentiments after World Steel Association (WSA) said that India retained its position as the world's third-largest steel producer in the month of March. Public sector oil marketing companies (OMCs) too edged higher after Brent crude oil futures extended previous session’s losses after Saudi Arabia announced the end of its military campaign in Yemen, easing tensions in the Middle East, and traders expected another weekly build in US crude stockpiles. Additionally, sugar stocks remained on buyers’ radar on reports that the government is likely to raise sugar import duty. On the flip side, software and metal counters remained in somber mood, after India’s third largest software services firm Wipro posted a net profit of Rs 2,286.5 crore in January-March 2015, modestly higher by 2.1 per cent than Rs 2,239.1 crore a year-ago, missing the street estimates. Finally, the BSE Sensex surged 214.09 points or 0.77% to 27890.13, while the CNX Nifty gained 51.95 points or 0.62% to 8429.70.