Markets likely to make bounce back on positive global cues

The Indian markets closed marginally lower after a choppy trade on Wednesday. Today, after a day of break the indices are likely to start with new vigor supported by the news on Greece. Some recovery is likely to be seen in the commodity stocks, while there will be buzz from the primary markets too, as the mega IPO of MCX will make its debut on the bourses today. The first Indian exchange to be listed has received overwhelming response and is expected to debut at good premium. There will be curiosity for the listing as MCX is the first company to be listed after Sebi introduced circuit filters on the listing day for IPOs. However, the traders after the election results will be eyeing the RBI’s monetary policy and budget to take further course of action.

Meanwhile, Moody's Investor Service has said that India’s budget deficit will remain more vulnerable than rating peers to every growth slowdown until the tax base is substantially expanded. The report has mentioned that a modest decline in India’s GDP growth widened its fiscal deficit more significantly than observed elsewhere.

The US markets rose for the second straight day on Thursday as investors speculated that Greece was successful in its debt swap efforts, though there wasn’t any official announcement but the investors believed Greece would move with its plans. Meanwhile, the Labor Department reported that jobless claims rose by 8,000 to a seasonally-adjusted 362,000 in the week ended March 3. However, the number of planned layoffs at companies dipped last month. The Asian markets have made a positive start and barring China all the major indices are trading with good gains. Shanghai Composite was marginally lower despite the news that China’s inflation eased more than forecast to the slowest pace in 20 months. The investors in the region were in cheerful mood as a majority of eligible Greek bondholders agreed to a debt restructuring.

Back home, stock markets in India snapped a choppy session of trade on a flat note on Wednesday as investors chose to remain on the sidelines, lacking any significant upside triggers to open fresh positions a day ahead of a public holiday on account of festival ‘Holi’. The benchmark equity indices closed with trivial losses after gyrating in a relatively narrow range and after plummeting over two and half a percentage points in last two sessions. The psychological 17,250 (Sensex) and 5,250 (Nifty) levels proved as difficult nuts to crack for the frontline indices which drifted lower in late morning trades as investors remained worried that the ruling Congress led UPA coalition government’s debacle in four out of five states that went to the polls last month may prove as a deterrent for economic reforms in the nation. Meanwhile, global ratings agency S&P's warning that it could lower India's sovereign credit rating if the government continues with fiscal excesses or if it does not adopt policies to boost growth, too weighed on sentiments. However, the key gauges found some support around the crucial 17,000 (Sensex) and 5,150 (Nifty) levels and recovered following the European markets. Domestic investors at large have now shifted their focus towards the RBI's March credit policy review meet in which they expect the central bank to ease liquidity condition to spur economic growth while the Union Budget 2012-13, which is scheduled to be unveiled on March 16, 2012, too is being eyed for further direction. Besides, the glumness looming in the global markets too dampened investors’ mood in the session. Markets across Asian region faltered for third straight session as distressed market participants continued to square off positions ahead of a deadline for debt laden Greece to get sufficient support for a bond swap deal from its private creditors and avert a disastrous debt default. Back home, investors largely squared off positions from the Metal and Oil & Gas counters which plunged over 1.5% each. Index heavyweights like Reliance Industries and BHEL plunged close to 2% in the session, thereby preventing the benchmarks from moving into the green terrain. While some gains in high beta Realty and IT pockets capped the losses for the markets. Finally, the BSE Sensex lost 27.77 points or 0.16% to settle at 17,145.52, while the S&P CNX Nifty declined by 1.95 points or 0.04% to close at 5,220.45. Indian markets remained closed on Thursday on account of local festival ‘Holi’.