Markets likely to get a soft start on weak global cues

The Indian markets showed fervent rally in last session and the major indices surged by about a percent, there were some better earnings announcements, as well as some buzz in the telecom sector coupled with appreciating rupee that helped the markets move higher. Today, the start is likely to be bit soft tailing weak global cues, though recovery can soon be expected. Traders are likely to get some support with the Prime Minister's key economic adviser, C Rangarajan’s statement that there is no case for lowering India's credit rating and global agencies need to look at the international scenario before taking any rating action. The telecom stocks are likely to keep buzzing as in the CDMA spectrum auction now only one bidder ‘Tata Teleservices' is left after Videocon decided to withdraw its application to bid for CDMA spectrum. In GSM segment there are still five players left in the race, however from there too, some are likely to withdraw their candidature.

The result season is on its peak and there will be lots of important result announcements influencing the direction of the markets. Allahabad Bank, Amara Raja, Ceat, Cipla, Future Capital, Hindustan Copper, Ingersoll Rand, Madras Cements, Man Infra, Reliance Power, Solar Inds, Tech Mahindra, Vijaya Bank etc. will be announcing their numbers today.

The US markets suffered sharp cuts on Friday, as traders turned cautious ahead of the Presidential election and also the better than expected jobs data raised concern about the US Fed’s bond buying programme. Most of the Asian markets have made a soft start, Chinese market too was marginally in red despite the report that China’s services industries rebounded from the slowest expansion in at least 19 months, Chinese Services PMI rose to 55.5 in October from 53.7 the previous month.

Back home, Indian stock markets showcased a spirited performance on Friday galloping about a percentage point in the session as fervent bulls relentlessly piled up hefty positions not only in heavyweight stocks but across the broader markets. The vivacious rally in equities helped the Sensex to re-conquer its psychological 18,750 mark while, Nifty snapped the session near its crucial 5,700 mark on their northbound journey. The benchmarks extended their up-move for the third straight day on large volumes as sentiments got fortified owing to persistent foreign fund inflows and appreciating rupee amid firm global setup. Tentative improvement in investors’ risk taking ability was also evident after the Finance Minister P Chidambaram met Foreign Institutional Investors (FIIs) to make them informed about the current economic situations and on the steps being taken by the government to boost the economic growth. Meanwhile, investors showed hefty buying interests in consumer durable space which spurted over one and a half percent on hopes that sales growth would pick up in November ahead of the festive season. Stocks from telecom sector too exhibited a good run as stocks like Idea Cellular, Reliance Communication and Tata Communication all edged higher after 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. Cues from global markets too remained supportive as most of the Asian equity indices ended the session in the green buoyed by string of upbeat data from the United States. Back home, some amount of support also came in from software pack, led by Wipro which spurted about a percent after reporting a better-than-expected Q2 earning. The company, on consolidated basis, registered 24 percent jump in its net profit at Rs 1610.60 crore in Q2FY13 as compared to Rs 1300.90 crore for the same quarter in the previous year. Group’s total income has increased by 17.98% at Rs 10943.70 crore for quarter under review. Shares of automobiles companies too remained in limelight on the bourses with most of them trading higher by up to three percent after reporting a strong growth in October vehicle sales. Finally, the BSE Sensex surged 193.75 points or 1.04% to settle at 18,755.45, while the S&P CNX Nifty rose by 52.65 points or 0.93% to end at 5,697.70.