The Indian markets largely remained un-influenced by the gains of other global markets and made a flat closing after a choppy trade in last session. Today, the start is likely to be flat, as the regional peers are not showing much enthusiasm to the US Fed’s indication of a gradual rate hike. However, markets will get some strength in latter part of the trade supported by industry body CII terming the GDP calculation methodology an "imprecise science" and pegging the country's economic growth at around 8 per cent for the current fiscal, higher than the RBI's projection of 7.6 per cent. Also, Reserve Bank of India Governor Raghuram Rajan has said that conditions are in place for the Indian economy to start growing faster in the next few quarters as banks pass on its rate cuts to their borrowers. Meanwhile, in an important development the government approved fiscal deficit target of 3 percent for states, as recommended by the 14th Finance Commission for the 2015-20 period. It has also provided for year-to-year flexibility for additional deficit. The telecom stocks will continue buzzing, as the Union cabinet has decided to allow telecom companies to use spectrum allocated to them without auction to offer new services to consumers at a provisional price recommended by the telecom regulator. The cabinet decision will allow companies to deliver third generation or fourth generation mobile services as well as to share and trade the spectrum with other operators.
The US markets surged in last session coming out of their consolidation mood. The major averages not only ended the session just off their best levels of the day, but the tech heavy Nasdaq was able to post its three-month closing high. The sharp gains were partly due to a notable increase by the price of crude oil. The Asian markets have made a mixed start with some of the indices trading in red despite US Federal Reserve meeting minutes reaffirming that US policy makers aren’t in a rush to raise interest rates.
Back home, there was hardly any relief for the Indian markets after being butchered in the last session, as the benchmarks after a strong start on supportive Asian market cues lost their direction and showed a volatile trade throughout the session, moving in and out of the red zone. Markets lacked conviction from the very beginning and faced intermittent profit taking at the higher levels. Traders even overlooked report of private sector activity in the country, which registered a significant uptrend and surged to a 37-month high in March. The Nikkei Services Business Activity index rose to 54.3 in March from 51.4 in February and its joint-highest level since June 2014. Meanwhile, the Nikkei India Composite PMI Output Index, which maps both manufacturing and services sectors, climbed from 51.2 in February to a 37-month high of 54.3 last month. Going forward, Indian services companies remain optimistic that activity will increase further over the coming 12 months. There was some strength in rate sensitive stocks after RBI Deputy Governor S S Mundra, a day after the central bank cut policy rate by 0.25 per cent, expressed hope that transmission of lower interest rate through banks will be more effective this time. On the global front, while the US markets ended lower, the Asian markets made a mixed closing. The European markets made a cautious start but soon moved higher buoyed by energy stocks. Back home, Indian markets kept moving in a narrow range throughout the day, with every attempts of recovery meeting similar strength of profit booking. It was hopes of more rate cuts going forward and statement of NITI Aayog member Bibek Debroy’s that India's growth could be around 7.8 percent in 2015-16, higher than the Finance Ministry's projection of 7.5 percent that restricted any major fall in the markets, though the general sentiment remained cautious as companies gear up to report their March quarter earnings. Finally, the BSE Sensex ended at 24900.63, up by 17.04 points or 0.07%, while the Nifty ended higher by 11.15 points or 0.15% at 7614.35.
