Markets to get a positive start on supportive global cues

The Indian markets came out of their eight days long consolidation mood in last session and the major indices were able to gain about a percent. Though the global cues remained lackluster but the rate sensitive’s got encouragement with one of the deputy governor's of RBI KC Chakrabarty stating that the Reserve Bank of India will step in to inject more liquidity into the market if the need arises. Today, the start is likely to be on a positive note on supportive global cues. However, traders will be eyeing the parliament’ winter session which is likely to be stormy. There will be some action in the PSU sector as the government will kick start its ambitious disinvestment programme on Friday with a 4% stake sale in Hindustan Copper. There will buzz in the whole trading arena, as the government has allowed India’s largest insurer Life Insurance Corporation (LIC) to invest up to 30% in a company as against the earlier limit of 10 per cent. The telecom stocks too may be reacting to the statement of Planning Commission Deputy Chairman Montek Singh Ahluwalia, who has said that it was a mistake to set a high reserve price of the 2G spectrum auction.The Government had set the reserve price at Rs 14,000 crore for 5 Mhz of pan-India spectrum.

The US markets extended their gains for the fourth straight day ahead of the holiday, however the trade remained choppy but the traders got encouraged with report of rise in consumer confidence and manufacturing; also as Weekly jobless claims fell to 410,000. The Asian markets have made mostly a green start. Japanese market has taken the lead as weaker yen boosted the outlook for country’s exporters.

Back home, the eight back to back sessions of subdued performance finally came to a halt, with both the gauges snapping the session above their psychological 18,450 (Sensex) and 5,600 (Nifty) bastions as investors went for bargain hunting. A relief rally was long due for the markets however, Wednesday’s gains for benchmark indices was merely a glimpse of a pullback rally considering the fact that key gauges have lost over massive three percentage points in the previous eight sessions of downtrend. Nonetheless, the bourses showed some fervor in the session and garnered around three fourth of a percent as market participants hunted for badly beaten down but fundamentally strong bets. Sentiments also got some boost after government announced that it will place bills to liberalize the insurance and pension sectors and a bill to amend banking regulations which includes increasing the voting rights of large shareholders in private banks to 26 percent from 10 percent, in the winter session of the parliament. However, global cues remained unsupportive. Back home, retail stocks were on buyers’ radar on hopes that FDI issue may get resolved in the winter session of Parliament that will start from November 22, 2012. Sentiments also got some support from Aviation stocks as scrips like Jet Air India, Spicejet, and Kingfisher Airlines all edged higher as the number of passengers carried by air carriers rose 13.36% in October 2012 over September 2012. Further, sentiments were buttressed by the sparkling gains in Pharmaceuticals stocks, viz. Aurobindo Pharma, Cipla, Ranbaxy Lab and Sun Pharmaceuticals, which rallied ahead of GoM decision for resolving deadlock on Pharma pricing. The GOM meet for resolving deadlock assumes importance with the expected attendance of the finance minister, where hopes are high that the pricing policy, which has been mired since 2003, will be revamped. Some amount of support also came in from public sector oil marketing companies as stocks like BPCL, HPCL and IOC edged higher after international crude reversed most of its last session gains on Tuesday and plunged sharply as supply concern eased on report that Israel and Palestinians were near a truce. Finally, the BSE Sensex gained 131.06 points or 0.72% to settle at 18,460.38, while the S&P CNX Nifty rose by 43.25 points or 0.78% to end at 5,614.80.