Markets likely to get a good start on sanguine global cues

The Indian markets witnessed a smart recovery in last session after losing their crucial support levels, though they closed marginally in red but recuperated most of their lost ground. Today, the start is likely to be good on sanguine global cues. The traders however, will be eyeing the IIP data to be announced later in the week and the monsoon condition, which has led to a draught like situation. Many states are still to sow rice the crop of the season, due to deficient rain. The telecom stocks are likely to be buzzing, as after fixing the minimum price at Rs 14,000 crore for 5 units of GSM airwaves in the 1800 MHz, the panel of ministers on spectrum, headed by finance minister P Chidambaram, will meet today to consider a revised timeline for the spectrum auctions, as the government may not be able to meet the deadline for completing the sale process by this month-end. There will be buzz in the markets related to the latest SEBI order to bar 19 entities from trading and dealing in the securities market for deliberately bringing down prices, Tulip Tele, Pipavav Defence, Parsvanath Developers are among the major to get impacted.

Also, there will be lots of important result announcements. Aditya Birla Nuvo, Andhra Bank, BEML, Britannia Inds, Cadila Healthcare, DLF, EIH, Escorts, Essar Shipping, Financial Technologies, Hinduja Venture, Indo Rama Synthetics are among many to announce their numbers today.

The US markets made a good bounce back on Friday on getting better than expected jobs data, though the rate of unemployment increased but the non-farm payroll employment showed fastest pace of growth since February. The Asian markets have made a good start of the new week with some of the indices surging by over a percent; Japanese market was up by close to two percent, as the yen has weakened against most of its major peers. There is optimism across the global markets as Greece and its international creditors agreed on the need to strengthen policy efforts to support the economy.

Back home, stock markets in India showcased a remarkable pull back in second half of trade as the frontline equity indices, after hitting the lowest point of day in late morning trades, took a turn for the better. Bourses trimmed losses of around a percentage point from day’s low and settled with a marginal cut. Though, the bourses traded in the red throughout the day’s trade. The benchmark equity indices not only went on to accumulate weekly gains of over two percent but also managed to regain their psychological 17,150 (Sensex) and 5,200 (Nifty) levels. After the weak opening and reeling under severe selling pressure for most part of the day, not many had hoped that Indian bourses would manage to recover like that especially on a day when stock markets across the globe wilted after European Central Bank President Mario Draghi failed to deliver immediate action to stem the region’s debt crisis. While, the selling got intensified with IMD stating that monsoon rains will not be enough to save the country from its first drought in three years, monsoon rains crucial for the agriculture has been termed deficient by 19 percent and may add up to the inflationary pressure. However, the downside in markets remained capped after news that Spain passed a key test on Thursday by easily selling 3.1 billion euro of debt despite investors’ doubts that the European Central Bank will be in a position to help struggling euro-zone economies when it holds its monthly meeting later in the day. Back home, the domestic markets ricocheted around a percent from the lowest point in session in the second half of trade as investors relentlessly bought blue-chip stocks from the Oil and Gas, defensive healthcare and technology spaces. Meanwhile, the upside in markets was limited as drought-like situation looms large, especially towards September when the El Nino conditions are likely to have an adverse impact on the rainfall over the country. Sentiments also got undermined after money market woes resurfaced as Indian rupee weakened further and breached its crucial 56 per dollar mark. Besides, shares of telecom related companies fell ahead of the likely Cabinet meet to discuss the reserve price and usage charges of spectrum, deferred payment options by operators and rollout obligations. Finally, the BSE Sensex lost 26.43 points or 0.15% to settle at 17,197.93, while the S&P CNX Nifty declined by 12.05 points or 0.23% to close at 5,215.70.