Markets likely to extend gaining momentum with a positive start

The Indian markets closed with modest gains in the last session supported by some encouraging auto sales numbers and better than expected core sector and PMI data. Today, the start is likely to be in green and the markets may extend their jubilation on positive global cues. The telecom companies are likely to keep buzzing as the EGoM allowed the existing players to retain a maximum of 2.5 MHz in prime band spectrum of 900 MHz frequency band instead of the telecom regulator’s suggestion to switch to the 1,800 MHz band when their current licences expire, provided they pay a price which will be determined later through auction. The FIIs too are likely to get some sense of respite as Finance Minister P. Chidambaram in its meeting with top foreign institutional investors and fund managers allayed their concerns on retrospective taxation and also provided them some comfort on GAAR’s implementation. There will be some buzz in the commodity stocks too, as the government under the Legal Metrology Amendment Rules 2012 has made it mandatory for a manufacturer to pack items in prescribed standard sizes only.

Also, there will be lots of important result announcements to keep markets buzzing.3I Infotech, Apollo Tyres, Berger Paints, Crompton Greaves, Elder Pharma, Hotel Leela, Jet Air India, KEI Inds, Marico, MCX, Phillips Carbon, REC, Shree Renuka Sugar, Sobha Developers, TV Today, Union Bank and Wipro will be among many to announce their numbers.

The US markets after stabilizing in last session post Hurricane Sandy, surged sharply on Thursday on a series of encouraging economic reports, including a surge in consumer confidence. Technologies companies too moved higher on good jobs report. The Asian markets have made mostly a positive start and some of the indices are up by over a percent taking cues from the US markets and on speculation China’s economy may be stabilizing.

Back home, Indian equity markets managed to snap yet another session in the green territory with the frontline equity indices amassing about half a percent gains and extending the gaining streak for the second consecutive session. The frontline gauges showed side-ways movement since the start due to fall in index heavyweight Reliance Industries (RIL) after anti-corruption activist-turned-politician Arvind Kejriwal on October 31, 2012, charged RIL’s chairman Mukesh Ambani for getting undue favours from the government over a contract to develop natural gas fields. Though, the company’s stock recovered from the down fall after RIL refuted Arvind Kejriwal’s allegations. Frontline indices took U-turn in the second half as sentiment got some boost with survey showing that India’s manufacturing activity growth inched up in October from September’s 10-month low. HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at steady space of 52.9 in October. Sentiments also got bolstered after the growth in eight core sectors, which occupies 37.9% of weightage in the overall Index of Industrial Production (IIP), registered a growth of seven-month high at 5.1% in September, faster than the upwardly revised 2.3% in August and 2.5% in the September month of the previous fiscal, mainly on account of low-base advantage and rapid expansion in coal, cement and petroleum refinery products. Sentiments also got buttressed on the back of good Auto sales figure for the month of October. Maruti Suzuki India reported 86% growth in October 2012 total sales while; M&M registered 29% growth in October sales. Cues from global markets too remained supportive as European counters traded firmly in the early deals. Back home, some amount of support also came in from consumer durable space which spurted over massive five percent led by Titan Industries, which reported 21.35% rise in its net profit at Rs 180.14 crore for the quarter ended September 30, 2012 as compared to Rs 148.45 crore for the same quarter in the previous year. Moreover, hopes that sales growth would pick up in November ahead of the festive season too supported the stocks in the same segment. Telecom stocks, viz., Bharti Airtel, Idea Cellular and Reliance Communication, too rang loud ahead of EGOM meet later in the evening to take a final call on the contentious issue of taking back the more efficient 900 MHz spectrum being used by the older telecom operators for reallocation at a later auction, a process commonly referred to as re-farming. Finally, the BSE Sensex gained 56.32 points or 0.30% to settle at 18,561.70, while the S&P CNX Nifty rose by 25.32 points or 0.45% to end at 5,645.05.