Markets likely to get a flat-to-positive start

The Indian markets presented a good show in last session, and despite being the expiry week benchmark indices showed a firm trade, gaining over a percent each. Today, the mood is however looking cautious and some profit booking too may appear in the late trade. The Auto stocks are likely to remain under pressure, though petroleum minister has declined of raising diesel prices, it has been reported that the finance ministry is taking a fresh look at a proposal to hike excise duty on cars running on subsidized diesel. Meanwhile, the rupee recovery too will be watched, its firmness may strengthen the sentiments of the marketmen, encouraging to go for risky assets. The top gainers of last session, banking stocks may come under pressure as Finance Minister has warned the state-run banks against deteriorating asset quality and has called for better professional supervision. Further, the telecom companies too may remain buzzing as they may have to shell out lower amounts for airwaves in the upcoming auctions if the panel of ministers on spectrum sale accepts a proposal to sell the scarce resource for a 10-year period.

Also, there will be lots of important result announcements. Apollo Hospitals, Aurobindo Pharma, Bombay Rayon, EIH, GMR Infra, Hindustan Copper, Hotel Leela, HPCL, ONGC, NCC, Lanco Infra, Jindal Stainless, Power Grid Corporation, Praj Inds, SAIL, Shipping Corporation, Sun Pharma, Tata Motors, WELCORP etc are among the many to announce their numbers today.

The US markets remained closed on Monday for the Memorial Day holiday, unable to give any cue to the other global markets. Though, the Asian markets have made a mixed start and some of the indices are trading in red as concern grew that European banks will need more financial support. Japanese index was leading the pack of laggards on report that unemployment unexpectedly rose in the country. The unemployment rate increased to 4.6 percent in April from 4.5 percent in March, the first increase in three months.

Back home, stock markets in India got an enthralling start of the May series futures and options contract expiry week with the benchmark equity indices vivaciously rallying around one and a quarter percent and outperforming most global peers. After showing signs of consolidation in last session, the key indices regained their vitality on Monday. The markets remained in fine fettle through the session, though some profit booking at high levels was seen in early afternoon trades post oil minister’s comments that no date has been fixed yet for the EGoM to meet on deciding over diesel and LPG price hike. However, the markets soon rebounded tracking the rally in European markets and kept gathering from strength to strength to eventually snap the session around the high point of the day. Sentiments from across the globe remained sanguine as investors drew some solace from opinion polls showing parties favoring Greece's bailout programs could be able to form a coalition government. Most Asian markets too recovered after a cautious opening and settled with notable gains. Back home, leads from the domestic money market too were buttressing as the rupee extended its streak of appreciation for third straight session and strengthened to 55.18 against a dollar. While a report from rating agency Moody’s that rupee downslide won't hurt India's debt profile and will have only a limited impact on nation’s sovereign ratings, too did its bit in allaying investors’ concerns. On the BSE sectoral front, investors were seen piling positions in the rate sensitive Bankex counter which surged around two and half a percent being the top gainer in the space. The Power and Capital Goods pockets too traded with notable gains of around two percent, helping the frontline indices rally.  However, reports that the government has no immediate plans to raise the retail prices of diesel, kerosene and cooking gas did not go down well with investors and squared off positions from the PSU oil marketing companies like HPCL and BPCL which plunged between 1-2%. While other Oil & Gas majors like Gail India and ONGC too went home with notable losses putting bit of pressure on the benchmark indices. Finally, the BSE Sensex surged 199.02 points or 1.23% to settle at 16,416.84, while the S&P CNX Nifty soared by 65.25 points or 1.33% to close at 4,985.65.