Markets to extend gains with a flat-to-positive start

The Indian markets after a very volatile day of trade managed gains of over a percent in last session. Today, the start is likely to be mildly in green, traders will be getting some support with Finance Minister Arun Jaitley’s statement that government is committed to passage of GST Bill in July. There will be some buzz in the infra sector  with the government clearing two major policy initiatives to give a fresh thrust to the highways sector and bring the private sector back on board. The government has given the go-ahead to a comprehensive exit policy for developers aimed at improving the availability of funds in the market and also authorised the National Highways Authority of India (NHAI) to intervene in projects that are near completion but stuck due to a lack of funds. The PSU stocks will keep buzzing with government approval of a 10% stake sale in Indian Oil Corporation and 5% in power producer NTPC. Fertiliser stocks too will be in action after the approval of the new urea policy which aims to maximize indigenous urea production and promote energy efficiency in units to reduce the subsidy burden on the government. The policy is expected to raise urea production by 20 million tonnes and reduce imports. India's annual.

The US markets made mostly a flat closing in last session, while the Dow and S&P extended their decline, Nasdaq was modestly higher. The trade remained choppy as traders kept a close eye on the bond market following the release of disappointing retail sales data. Retail sales were virtually unchanged in April, inching up by 0.1 percent. The Asian markets have made a mixed start. The Japanese market has declined with rise in yen after a weaker-than-forecast US retail sales fueled concern about growth in the world’s largest economy.

Back home, Wednesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around one and a half percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 27,250 (Sensex) and 8,200 (Nifty) bastions. Earlier, markets made a gap-up start as investors remained hopeful that Reserve Bank of India (RBI) will slash key interest rates but soon sharp sell-off witnessed and markets gave up all of their gains  as investors turned cautious with global rating agency Moody’s warning that monsoon failure and global financial volatility could pose additional risks to India's growth this year. Nevertheless, markets picked-up pace in last hour of trade to end near intraday high levels. Overall, sentiments remained up-beat with Paris-based think tank OECD saying that India is poised for stable growth even as economic activities are easing in neighbouring and some other developed nations. In other encouraging development the RBI has called for higher capital outlays, consistent fiscal consolidation and limiting the debt-GDP ratio to improve the finances of the states, whose combined gross fiscal deficit has improved by 20 bps to 2.3 percent of GDP in FY 2014-15. On the macro-economic front, the retail inflation softened further to a four-month low of 4.87% in April compared to 5.25% in March. In contrast, factory output growth slowed to a five-month low of 2.1 per cent in March as against 5 per cent registered in February. Global cues too remained supportive with European counters making a firm start, while Asian markets ended mostly in the green. 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. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.95 per dollar at the time of equity market closing against the Tuesday’s close of 64.16 on the Interbank Foreign Exchange. Rally in rate-sensitive sectors mainly financials and auto too aided the sentiments after retail inflation softened further in April giving rise to hopes of a rate-cut by the RBI. Finally, the BSE Sensex surged by 373.62 points or 1.39% to 27251.10, while the CNX Nifty soared by 108.50 points or 1.34% to 8,235.45.