Markets to extend the gaining momentum with a positive start

The Indian markets after a choppy trade managed to post gains of around a percent in last session. Today, the start is likely to be extension of the gains amid jubilant global cues. Traders are likely to get some support with Cabinet’s approval for the WTO's Trade Facilitation Agreement (TFA) which aims at easing customs procedures to boost commerce. TFA will contain provisions for movement of goods, release and clearance of goods and goods in transit. Also, as Revenue Secretary Hasmukh Adhia has indicated that the Centre will announce a final roadmap for rationalising corporate tax exemptions in the Union Budget 2016-17. The aviation stocks will be in focus, as the senior officials of leading airlines IndiGo, Jet Airways, SpiceJet and GoAir have met Minister of State (PMO) Jitendra Singh demanding level playing field with the foreign and the new airlines in the draft civil aviation policy released last year. There will be some buzz in the pharma stocks too on report that department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers is expected to come out with a new bulk drug policy in less than a month with an objective to grow the Indian pharmaceuticals sector to a $200 billion industry by 2030.

The US markets extended their rally, moving sharply higher over the course of the trading day in last session, as there was report of much bigger than expected increase in industrial production in the month of January. Traders also got support with rise in crude prices on report that Iranian Oil Minister has offered support for a plan to maintain a ceiling on oil production. The Asian markets have made a strong start tailing the surge in US markets, with some of the indices gaining over 2 percent as oil’s second day of gains bolstered sentiment.

A session after displaying a distressing performance, Indian benchmark indices managed to pull through a scintillating performance by vivaciously rallying around a percent on Wednesday, thanks to the hefty short covering in the beaten down blue chip counters. Sentiments got some support with the report that the government is likely to meet its fiscal deficit target of 3.9 per cent of the GDP for the current financial year, largely on account of the latest round of excise duty hikes on oil products and marginal compression in expenditure. Furthermore, market participants also got some light with the report that International development banks from South Korea, Japan and Germany have shown interest in funding multibillion-dollar industrial corridors coming up across the country. These belts with special manufacturing clusters and smart cities are expected to spur economic growth.  Some support also came with Union Commerce and Industry Minister Nirmala Sitharaman’s statement that the FDI inflows in the country are improving day by day and more and more investments are coming from sectors other than IT and ITeS. However, investor remained cautious with exporters body FIEO’s observation after exports fell for the 14th month in a row, that the country may end up with outbound shipments of $260 billion in 2015-16, sharply lower than the $ 310.5 billion mark achieved in the previous fiscal. Market participants also remained concerned with report that foreign portfolio investors (FPIs) selling shares worth a net Rs 964.19 crore on February 16, 2016. Besides, the Indian rupee depreciated to near record lows against the American dollar, forcing the RBI to intervene to stem further falls, also weighing on the sentiment. The rupee dropped to as low as 68.67 to the dollar, not far from a record low of 68.85 hit in August 2013 when India was hit with its worst financial turmoil in the recent times. On the global front, Asian stocks declined, while shares were higher in Europe as oil prices stabilized. Back home, after the subdued opening, the key gauges plunged to lowest point in the day on sharp across the board sell-off. Thereafter started the recovery in the bourses, which kept moving higher slowly but steadily. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels in dying moments. Finally, the BSE Sensex surged by 189.90 points or 0.82% to 23381.87, while the CNX Nifty rose 60.20 points or 0.85% to 7,108.45.