Markets to get a flat start, may gain momentum after US election results

The Indian markets extended their gaining streak for the fifth straight day in last session, supported by some rate sensitives’ as the RBI governor indicated for a rate cut as early as January next year, there were some good earnings announcement that helped the markets move higher. Today, the start is likely to be in green though the trade is likely to remain cautious and once the results of US elections are finally out, the markets will get momentum. Traders will also be eyeing the movement of rupee after it plunged to a fresh two months low during last session, as heightened risk-aversion ahead of the US Presidential election sent the dollar higher. The local currency is likely to remain under pressure with rise in gold import during the festival season and start of process to change leadership in China. The PSU oil marketing companies too will be watched as they are waiting for comfort letter from the finance ministry on the release of fuel subsidy payments for the first six months of 2012-13 to avert a credit ratings downgrade. There will be some action in power companies too, as private power producers have accused Coal India of drafting a 'one-sided' fuel supply agreements (FSAs) favouring Government companies.

Also, there will be lots of important result announcements to keep the markets buzzing. Advanta India, Balrampur Chini, Bombay Dyeing, Cadila Healthcare, Gujarat State Petronet, Hanung Toys, India Glycols, Indraprastha Gas, Kingfisher Airlines, NMDC, Radico Khaitan, Tata Motors, TBZ, Uco Bank etc will be announcing their numbers.

The US markets surged on Tuesday ahead of the results of presidential election; polls showed Obama and Romney neck-and-neck in a race though the prospect of a winner in the election removed a major uncertainty that has been dogging investors. The Asian markets have mostly made a positive start, however the Chinese market declined for a third day before the outcome of US presidential elections and China’s leadership congress.

Back home, prolonging their winning streak to fifth day in a row, key Indian benchmarks snapped the session near their intraday high with Sensex recapturing its crucial 18,800 mark. The frontline indices traded cautiously for most part of the day’s trade as investors remained cautious ahead of the US Presidential Election as opinion polls indicated a neck-to-neck fight between President Barack Obama and Republican challenger Mitt Romney. The psychological 18,800 (Sensex) and 5,700 (Nifty) levels proved as strong support levels as the key indices despite repeated attempts refused to go below those levels. Bulls picked up the pace in the late trade, which helped the markets to end near day’s high supported by recovery in European markets. Domestic sentiments were mainly supported by turnaround in European counters as Americans get prepared to decide whether giving President Barack Obama another four years in White House or replacing him with Republican challenger Mitt Romney. Back home, key domestic bourses, despite the subdued global cues, gained some momentum after Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the government is taking several steps to boost investor confidence and more such measures may follow. Buying in rate sensitive -- banking and realty -- too soothed the sentiments on some consoling news that the Reserve Bank of India may go for easing monetary policy as early as January. Meanwhile, marketmen also poured in their fund into risky equities on the back of some good second quarter earnings. Dena Bank registered rise of 23.79% in its net profit at Rs 239.64 crore as compared to Rs 193.58 crore in the corresponding month last year and Tech Mahindra too reported over 23 percent rise in Q2 net profit rose to Rs 296 crore, helped by new deal wins and acquisitions. Some amount of support also came in from PSU segment, which rose about half a percent as government is planning to raise around Rs 1,400 crore by selling a 12.15 percent stake in National Aluminum Company on Nov 9, as it seeks to urgently revive the stuttering disinvestment programme. Finally, the BSE Sensex gained 54.51 points or 0.29% to settle at 18,817.38, while the S&P CNX Nifty rose by 20.20 points or 0.35% to end at 5,724.40.