Markets to extend the jubilant mood with a positive start

The Indian markets bounced back in last session and surged by around half a percent on encouraging service sector data. Today, the start is likely to be good and the markets will be extending gains on bullish global cues. Traders will also be getting some support with credit rating agency Fitch’s statement, which ahead of the first advance estimates for GDP growth for 2017-18, has expressed optimism about India’s medium-term economic prospects and said it would outstrip China’s growth. The PSU banks will be in action as India's biggest state-owned banks are likely to get Rs 80,000 crore of fresh capital this fiscal year after the government sought Parliament's nod for additional spending toward the infusion. There will also be some reaction to the latest report from the credit rating agency Moody’s that the government's Rs 2.11 lakh crore capital infusion in PSU banks would narrow the gap between the capital profiles of public and private sector banks. The oil and gas stocks too will be in focus after the Directorate General of Hydrocarbons (DGH) unveiled a draft policy framework to promote enhanced recovery methods, with government's plan to offer fiscal incentives such as lower taxes and higher share in profit to companies to encourage them to boost oil and gas output from local ageing fields.

The US markets extended their bull-run and surged to fresh record highs in the last session, in reaction to a report from payroll processor ADP showing private sector employment jumped by much more than expected in the month of December. The Asian markets have made a positive start as investors around the world pile into equities at the start of 2018 amid robust economic data from the US to Europe to China, though the Hong Kong and Shanghai markets were flat.

Back home, Thursday turned out to be a fabulous day of trade of Indian equity benchmarks, with frontline gauges recapturing their crucial 10,500 (Nifty) and 33,900 (Sensex) levels amid firm global cues. After a positive start, there appeared not even an iota of profit booking in the session with benchmarks fervently gaining from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Sentiments remained upbeat with NITI Aayog’s expectation that the first strategic disinvestment of Central Public Sector Enterprises will be conducted within the current financial year. It said that the process of divestment is being carried out by DIPAM (Department of Investment and Public Asset Management) and the first transactions are expected in the current financial year after a long gap of 14 years. Some support also came with the Union Cabinet approving the revised model concession agreement for public private partnership projects in major ports. The amendments were made in the MCA to attract more investments in the port sector and are expected to clear the hurdles created by some of the provisions in the current model concession agreement. Markets extended northward journey on report that the Nikkei India services Purchasing Managers’ Index, or PMI, returned to modest growth in December amid signs of recovery from the effects of new goods and service taxes, or GST. The seasonally adjusted business activity index stood at 50.9 in December, up from 48.5 in November. The report highlighted that this expansion was mainly driven by manufacturing companies, with output growth here the sharpest since December 2012. Market participants also took some encouragement with private report that the second quarter results of the Indian Corporate sector have started showing some signs of stability, attributable to declining negative impact of the Goods and Services Tax (GST) and the festive season. Finally, the BSE Sensex surged 176.26 points or 0.52% to 33,969.64, while the CNX Nifty was up by 61.60 points or 0.59% to 10,504.80.