The Indian markets after remaining weak in early deals moved higher in the final hours and major bourses gained around half a percent for the day. Today, the start is likely to be strong and the markets will be extending the gains, as the Federal Reserve has scaled back its projection for interest-rate hikes, keeping its policy rate unchanged at the end of its two-day rate-setting meeting and has once again ignited the call of rate cut from the Reserve Bank of India. Meanwhile, markets will also be reacting to the government’s introduction of a bill in the Lok Sabha to further amend the Companies Act as part of efforts to address difficulties faced by stakeholders and improve the ease of doing business in the country. There will be buzz in the infra and aviation stocks, as President Pranab Mukherjee has said that India is planning to invest over $120 billion in the development of airport infrastructure and aviation navigation services over the next decade. Also, Minister for Civil Aviation P. Ashok Gajapathi Raju has said that the government will come out with a new civil aviation policy by next month. There will be some action in the PSU oil marketing companies too, as the oil marketing companies have increased the prices of petrol by Rs 3.07 per litre, while the prices of diesel has been hiked by Rs 1.90.
The US markets ended higher in last session, reacting to the dovish comments from the US Fed after it announced its widely expected decision to leave interest rates unchanged in a range from 0.25 percent to 0.50 percent. The Asian markets have made a positive start with some of the indices trading higher by over a percent, tailing the gains in the US markets and supported by surge in crude and commodity prices.
Back home, Indian benchmark indices witnessed a smart recovery in the second half of the session and ended the day in the green, however the trade remained volatile throughout the day. Investors took some encouragement with Standard & Poor's report that continued low oil prices will boost spending in India and help mitigate fiscal and current account deficits. According to the S&P report, India still leads the pack in terms of Asia Pacific GDP growth, but 2016 is shaping up as a year of reckoning on the policy front. Some support also came with the report that Foreign Direct Investment in the country increased by 29 per cent for the 15-month period -- ended December last year -- after the launch of ‘Make in India’ initiative. However, market remained under pressure for most part of the session on report that India’s merchandise exports contracted for the 15th month in a row in February amid tepid global demand and a volatile global currency market. Exports fell 5.6% in February from a year earlier to $20.73 billion, the slowest decline since December 2014 when shipments fell 3.77%. Market participants also remained cautious with the report that Agriculture sector, which provides livelihood to over 50% of the workforce in the country, grew by an average 1.6 per cent per annum in first four years of the ongoing Five Year Plan (2012-17), as against the targeted 4 per cent annual growth due to lower production. Meanwhile, metal and mining stocks dropped on the back of decline in global commodity prices, while the gold and jewellery shares reeled under pressure on report that gold imports in February declined 29.49% to $1.39 billion. Some weakness was also witnessed in fertilizers stock after the Ministry of Chemicals & Fertilizers made it mandatory for fertilizer companies to print the MRP and available subsidy on each bag of P&K fertilizers. On the other hand, banking stocks witnessed some strong buying as sharp decline in the consumer inflation and still negative wholesale inflation in February raised expectations of a rate cut by the central bank. On the global front, Asian markets ended mostly in green, while European equities traded firm in early deals. Back home, the frontline gauges managed to pare the early losses and rose above in the dying hours of trade, tracking firm trade in the European markets. Finally, the BSE Sensex gained 131.31 points or 0.53% to 24682.48, while the CNX Nifty rose 38.15 points or 0.51% to 7,498.75.
