Markets likely to start on a flat to slightly soft note

Indian markets extended their bull run on Friday with major indices gaining around a percent, though the broader indices could not perform in tandem with their larger peers but the consumer durables and power sector stocks mainly led the rally. Today, after an extended weekend the markets are likely to get a flat start, as the other Asian markets are trading mixed. Today, the telecom stocks are likely to be buzzing after TRAI issued draft guidelines for the sale and allocation of mobile phone frequency. The new TRAI policy aims at simplifying licensing rules, providing greater transparency, and encouraging mergers and acquisitions. Shipping industry too may be in limelight as Union shipping minister G. K. Vasan has said that government would award six projects under PPP models in the port sector in 2011-12. The other sector that would retain the investors’ attraction is banking, Finance Minister Pranab Mukherjee has said that the Indian government will provide adequate capital to all the public sector banks to help them face risks arising out the global economic uncertainties.

The US markets remained closed on Monday, unable to give any cue to the other global markets. The Asian markets have made a cautious start as expectations of a second bailout package for Greece ran out of steam with a deal still not quite sealed. Japanese markets were trading marginally in red as the traders were considering the stocks to be overbought after the recent rally.

Back home, Indian stock markets continued to rally with renewed vigor on last trading session of the week as the benchmark indices extended their northbound journey for the seventh straight week of the New Year. The frontline indices after the gap up opening managed to capitalize on the momentum and sailed beyond the psychological 5,600 (Nifty) and 18,400 (Sensex) levels. However, the key indices could not hold on to those levels for long and slipped lower after investors chose to take some profits off the table after the recent sharp upmove in domestic markets, which have skyrocketed around 18 percent in 2012, thanks to hefty buying from foreign funds who pumped in $4.4 billion so far this year. Nevertheless, the benchmark gauges closed near their seven month high levels as investors accumulated hefty positions in heavyweight stocks before going for an extended weekend owing to a public holiday on February 20. Shares of power equipment maker BHEL jumped over 6% on hopes that the public sector firm's order flows will get a big boost after Supreme Court cleared NTPC to place orders for supercritical equipment. Stocks from the power sector continued to hog the limelight with hefty gains while the Consumer Durables and Capital Goods pockets too are not far behind. Meanwhile, stocks from the shipping sector saw some action before settling on a negative note amid reports that Committee of Secretaries are likely to meet to discuss Shipping subsidy. On the global front, Asian markets settled on an optimistic note while European stocks too trended higher as sentiments remained positive on reports that ECB had agreed to exchange Greek bonds they hold for new bonds as part of a deal to help the debt-strapped country while a slew of encouraging US economic reports too boosted investors’ confidence. Earlier on the Dalal Street, the benchmark got off to a gap-up opening as investors largely remained influenced by the encouraging sentiments prevailing in Asian markets. After the optimistic opening, the frontline indices took advantage of the initial impetus and climbed to the highest levels in nearly seven weeks. However, the psychological 5,600 (Nifty) and 18,400 (Sensex) levels proved as stern resistances as the key indices got weighed down from those levels in mid noon trades. Though the bourses were not able to stage any recovery in the end, still they ended on a positive note with notable gains. Finally, the BSE Sensex gained 135.36 points or 0.75% to settle at 18,289.35, while the S&P CNX Nifty rose by 42.35 points or 0.77% to close at 5,564.30.

US market remained closed on Monday on account of George Washingtons Birthday, Presidents Day.

Crude oil prices extended their gaining streak on first trading session of a new week as investors added positions on growing optimism that Greece would secure a bailout in Brussels. The oil prices also gained momentum amid supply concerns after Iran threatened halting supplies to France and the UK. However, the upside in fuel prices was limited amid reports that there are alternative supplies that can make up for any loss of Iranian exports. Benchmark crude for March delivery surged $1.68 or 1.6% to $104.92 a barrel in electronic trade, on the New York Mercantile Exchange. In London, April delivery Brent crude advanced $0.49 or 0.4% to close at $120.07 a barrel.