The Indian markets despite some choppiness managed to hold their gains and ended higher by over half a percent. Today, the start is likely to be in green and the markets will extend their gains with Nifty expected to reclaim the 8450 mark amid resumption of buying by foreign investors. Traders are likely to get some encouragement with Reserve Bank of India Governor Raghuram Rajan’s statement that government has taken steps to propel growth. He also said that investors’ unhappiness over the taxation issues could have been avoided, but once raised, they have to go through a legal process which is on. Constituting the three-member A P Shah Committee that will look into MAT demand on FIIs, the government has named former CEA Ashok Lahiri as a member of the panel. Meanwhile, Finance Minister Arun Jaitley has said that inflation will not be a significant challenge though there is a possibility of below average monsoon and food prices getting impacted. Moreover, Jaitley added, “steps taken by the government has kept food prices low and pro-active government will always keep food prices low”. There will be some buzz in the telecom stocks on report that the government may not allow zero-rating plans in India.
The US markets continued their consolidation mood and once again ended mixed, though putting a halt to the gaining streak of the Dow. Meanwhile, Federal Reserve officials believed it would be premature to hike interest rates in June. The Asian markets after a positive start, have pared gains after a preliminary Chinese factory gauge missed the estimates and came in at 49.1. However, the Japanese market was trading higher as yen continued to trade weak.
Back home, resuming their northward journey, Indian equity benchmarks ended the Wednesday’s trade with a gain of over half a percent with frontline gauges recapturing their crucial 8,400 (Nifty) and 27,800 (Sensex) bastions. Markets after a firm start traded in tight band throughout the session as investors opted to buy beaten down but fundamentally strong stocks. Sentiments remained up-beat with the HSBC report that the current account deficit is likely to remain at ‘manageable levels’ of around 1.5 per cent of GDP in the current fiscal despite a marginal rise in oil prices and sluggish manufacturing exports. Some support also came with an UN report, saying that Indian economic growth is projected to surpass that of China, with the GDP expected to zoom by 7.7% in 2016, while China is projected to grow by 7 per cent in 2015 and 6.8 per cent next year. Also, due to falling prices of some food items, retail inflation based on consumer price index (CPI) for rural labourers eased to 5.49% in March from 6.19% in the previous month. The rate of price-rise based on CPI for agricultural labourers too softened to 5.24% in March from 6.08% in February. On the global front, European counters traded mostly in the red in early deals, while Asian markets ended mostly in the green. Back home, some support came in from report that foreign portfolio investors bought shares worth a net Rs 48.06 crore on May 19, 2015, as per provisional data. Buying in software and technology counters too aided the sentiments after the rupee depreciated considerably against the US dollar due to appreciation of the American currency overseas riding on strong economic data. Meanwhile, rate cut hopes buoyed the sentiment for banking shares. In a related development for the banking sector, Finance ministry issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Finally, the BSE Sensex surged by 191.68 points or 0.69% to 27837.21, while the CNX Nifty gained 57.60 points or 0.69% to 8,423.25.
