Markets to extend the jubilation with a positive start

The Indian markets bucking the global trends and recovering from the lows of the day posted good gains in last session. There were some positive statements from the domestic as well as international heads that led the markets higher. Today, the start is likely to be good and the markets will extend the jubilation, with the Nifty likely to reclaim the 7850 levels. Traders will be getting some support with Finance Minister Arun Jaitley’s statement that low oil prices have created a favourable environment for the Indian economy as it helped to absorb the loss faced by oil companies and kept inflation under control. Though, there will be some cautiousness too, as the India’s merchandise exports dipping for the 11th month in a row stood at $21.35 billion in October, down by 17.33 percent, due to weak global demands. However, the data showed trade deficit narrowed to $9.8 billion in October compared with $10.5 billion in the previous month. The export oriented stocks will keep buzzing, as the government has raised duty refund rates on a host of items, including iron, steel, garments and marine products with a view to promoting exports which are on a decline for the past 11 months. Apart from the rate changes, many new items have been included to “better differentiate” export products with higher duty incidence and also to address classification issues.

The US markets bounced back in last session with the major averages reversing their early slide, despite Friday evening's deadly terrorist attacks in Paris. Manufacturing performance in New York State too continued to contract in November. The Asian markets have made a strong start and some of the indices in the region are trading higher by close to two percent, as risk appetite returned. China and Taiwan led Asian equity markets higher, while Korean won strengthened and supported the currencies in the region.

Back home, coming out of a slew of declines, Indian markets witnessed a dead cat bounce on Monday, outperforming most of the regional peers and making an impressive start of the new week. The market mood looked under pressure in the morning and reacted in sync to the other global markets after the deadly attacks in Paris during the weekend, with Sensex breaching the crucial psychological levels of 25500 and Nifty coming very close to slip below 7700 mark. Bourses witnessed a smart turnaround with traders accumulating value stocks at lower levels. Blue-chips stocks that were heavily oversold last week, witnessed good buying along with the broader markets. In line with expectation inflation numbers, which remained in negative territory for the 12th month in a row gave some hopes of RBI reducing its rate further and led the rise in rate sensitive banking stocks. Wholesale Price Index (WPI) inflation for the month of October was reported at (-)3.81% vs (-)4.54% in September. The global cues remained mostly weak, as investors responded to Europe’s worst terror attack in a decade by shifting out of riskier assets. After the weak closing of Asian markets most of the European markets too made a weak start, as the euro fell, but they recovered. Back home, markets started moving higher in the second half encouraged by finance minister Arun Jaitley’s statement that India's economy has grown faster than any other, despite global economic turbulence, below par monsoons and private sector stress. He said that India's economic growth was expected to exceed 7.3 per cent in the current fiscal year and go higher still in the next one. It was also reported that FM is reaching out to the other political parties for the passage of GST bill in the winter session of parliament. It was mainly the strong buying in banking stocks that lifted the markets higher for the day. SBI surged by over 3%, ICICI Bank, IndusInd Bank gained over 2%, PNB was up by over 2.5%, and Yes Bank ended higher by around 2%. The other sectors that performed well included capital goods, FMCG and healthcare. Finally, the BSE Sensex surged by 149.57 points or 0.58% to 25760.10, while the CNX Nifty gained 44.35 points or 0.57 % to 7806.60.