Markets to start the crucial new week on a positive note

The Indian markets, supported by late buying posted gains of around a quarter percent in last session, logging bets weekly gains in last four months. Today, the start of the crucial week of F&O series expiry and Rail Budget is likely to be in green, tailing the positive cues from the global markets. Traders will also be getting some support with the Organisation for Economic Cooperation and Development (OECD) raising India's growth forecast compared to 7.3 percent expansion projected in November 2015. It has said that Indian economy will continue to see robust growth at 7.4 percent in the next financial year even as only modest recovery is expected in advanced economies. Meanwhile, Finance Ministry has said that the quality of government expenditure has improved significantly in the current fiscal and is resulting in high growth. The Plan Expenditure during April-December showed significant improvement. According to CGA data, it was 74.4 per cent of Budget Estimate at the end of December, as compared to 61.3 per cent a year ago. While, the railways related stocks will remain in focus, the auto sector stocks too will be buzzing with ongoing violent agitation in Haryana impacting many auto companies production. The industry body Assocham has estimated Haryana loss of around Rs 20,000 crore due to Jat stir.

The US markets made a mixed closing in last session, as traders expressed some uncertainty about the outlook for the markets following the significant volatility seen over past some time. The Asian markets have made mostly a positive and some of the major indices are trading with gains of over half a percent, led by the Chinese market which was up after replacing the head of its securities regulator. Japanese market too was higher on weakness in yen.

Back home, Indian equity benchmarks ended the choppy day of trade with gain of around a quarter percent on Friday with frontline gauges recapturing their crucial 23,700 (Sensex) and 7,200 (Nifty) levels. Traders took some encouragement with Moody's Investors Services’ report that Indian economy will grow at 7.5 percent in 2016 and 2017 as it is relatively less exposed to external headwinds, like China slowdown, and will benefit from lower commodity prices. Some support also came in from report that foreign portfolio investors (FPIs) bought shares worth a net Rs 419 crore on February 18, 2016. However, investors remained cautious with the report that Oil prices has reversed earlier gains on Thursday following a rise in US stockpiles but look set to post their first rise in three weeks after the battered market took heart from a tentative deal by major producers to freeze output at January highs. Meanwhile, Fitch Ratings stated that many PSU banks’ profitability taking a big hit, their credit profile will come under pressure unless they are adequately capitalized. It pointed to significant quarterly losses at several large public sector banks (PSBs) last week, underscoring long-standing balance-sheet and capital risks stemming from legacy issues pertaining to poor asset quality and weak provisioning. On the global front, Asian markets slipped from near three-week highs on Friday, while European markets traded mixed. Back home, after getting a gap down opening, Indian benchmark indices recovered from the day’s low and continued trade around neutral line for most part of the session, though some sharp selling was witnessed in noon session, which pushed the indices to lower levels, but final hour buying followed by some short covering, helped the indices to end session above neutral line. Finally, the BSE Sensex gained 59.93 points or 0.25% to 23709.15, while the CNX Nifty added 19 points or 0.26% to 7,210.75.