Markets likely to get a cautious start on final trading session of week

The Indian markets made smart come back in the second half of trade in last session and the major indices gained about a percent, as rate sensitive’s moved higher on hopes of policy easing by the RBI in its upcoming policy review next week. Today, the start is likely to be cautious and some profit booking too can be seen in early trade. The rate sensitive that moved higher on rate cut hopes after ESCAP estimated the Indian economy to grow at a slower pace of 5.9 per cent during the current fiscal as compared to an expansion of 6.5 per cent in 2011-12 due to severe monetary tightening, may see some trend reversal. Telecom stocks may keep buzzing, as the EGoM on telecom deferred a decision on re-farming of spectrum held by incumbent operators, though it decided to impose a one-time fee on mobile operators holding spectrum beyond 6.2 MHz. Sugar stocks too will remain under pressure after Union Government’s warning to mills to sell non-levy quota of October-November in time or face consequences. Rupee movement too will be eyed as the domestic currency has once again started depreciating, touching its lowest in three week in last session.

There will be some important result announcements, Adani Ports, Adani Power, Alembic Pharma, Eclerx Services, Exide Inds, Gati, IFCI,  ING Vysya Bank, ITC, L&T Finance Holdings, NIIT, Petronet LNG, Zee Entertainment and TCS etc will be announcing their numbers today.

The US markets ended lower on Thursday with tech heavy Nasdaq taking a big hit after heavyweight Google plunged badly on a weak earnings that missed analysts' estimates. The numbers were inadvertently released hours ahead of schedule and dragged the whole tech sector. Weak jobs report too weighed on the sentiments. The Asian markets have made a mixed start with some of the indices marginally trading in green, there is gloom in tech shares after disappointing earnings results from Google Inc. and Microsoft Corp. There was also report that Chinese government may not provide big economic stimulus measures, weighing down the sentiments.

Back home, after witnessing signs of consolidation in previous session, the key benchmark indices regained their vitality on Thursday by ending the session vivaciously over a percentage point, recapturing their crucial 5,700 (Nifty) and 18,750 (Sensex) levels. The markets, after a choppy morning session, remained in fine fettle throughout the day’s trade thanks to the broad gains of rate sensitive’s. Further, markets extended their bull run in last leg of trade as auto stocks and property developers rose on hopes for increased sales of big ticket items during the festival season, while lenders also gained on hope for increased retail loan demand. Optimistic global set-up also helped traders to pile up positions in the Indian equities. Asian counters rallied as a slew of Chinese data pointed to stabilisation in the world’s second largest economy, and positive US housing data helped to ease worries about a sharp slowdown in global growth. China’s third-quarter gross domestic product grew 7.4 percent from a year earlier, the slowest pace since the first quarter of 2009 and marking the seventh straight quarter of slower growth, but matching expectations. Leads from the domestic market too were buttressing as renewed buying was witnessed in rate sensitive sectors like banking and realty, which rose over two percent on hopes that central bank will respond with a 25 bps rate cut or a cash reserve ratio cut to complement the government's reform moves, the expectation that sector specific measures in the upcoming monetary policy review on October 30, gave a shot of adrenaline to the rate sensitive’s stocks. Some amount of support also came from Metal space as stocks like Hindalco, JSW Steel, Sterlite Industries, Tata Steel, Sesa Goa and NMDC surged after the latest data showed growth rate in China’s industrial production and retail sales accelerated in September 2012. Moreover, buying in Auto shares too supported the sentiments. Stocks of Maruti Suzuki, Mahindra & Mahindra, Force Motors, Bajaj Auto and Hero MotoCorp went up on hopes that sales growth would pick in October ahead of the festive season. However, telecom stocks like Bharti Airtel and Idea Cellular declined after the Telecom Commission recommended that incumbent GSM operators to give up all spectrum in the 900 MHz band at the time of their licence renewals beginning 2014. Finally, the BSE Sensex gained 181.16 points or 0.97% to settle at 18791.93, while the S&P CNX Nifty rose by 58.45 points or 1.03% to end at 5,718.70.