Markets likely to get a flat-to-positive start

The Indian markets despite a choppy session managed a positive close in last session; fragmented opposition gave hopes that the government will be able to pass all key reforms in the winter session of the parliament. Today, the start is likely to be flat-to-positive, though the eyes will be glued to the development in the parliament. There will be buzz in the pharma sector, as the Central Government has cleared the National Pharmaceutical Pricing Policy that will bring 348 essential drugs under price control, leading to reduction in prices and putting some pressure on the companies with major domestic concentration. Traders will also be eyeing the movement of rupee that has supported the IT stocks in last session and its further depreciation may keep supporting them even today. Marketmen are likely to get some confidence with Finance Minister P Chidambaram’s statement exuding confidence that expenditure would be contained for the current financial year. Telecom stocks too may see some action as the Centre on Thursday justified in the Supreme Court the non-auctioning of 900 MHz spectrum in 2G licences, saying that it was not the subject matter of 122 licences which were cancelled pursuant to the February 2 judgment.

The US markets remained closed on Thursday on account of Thanksgiving Day and were unable to give any cues to the other global markets. Most of the Asian markets are marginally trading in green on encouraging Chinese manufacturing data, easing tensions in the Middle East and continued hopes that Greece will get its next batch of bailout funds, though the Japanese market remained closed today.

Back home, key Indian benchmarks ended the volatile day of trade in positive territory for second day in a row with Sensex re-conquering its crucial 18,500 mark as investors showed some optimism after Lok Sabha Speaker Meira Kumar rejected Trinamool Congress’ (TMC) no-confidence motion against the government on its decision to allow foreign direct investment (FDI) in multi-brand retail sector. The Lok Sabha Speaker disallowed it as it could not muster the required support of 50 members. However, some profit booking was witnessed in the late trade as proceedings in both houses adjourned for the first day of Winter Session on uproar over FDI in retail and reservation to SCs/STs in promotions. Overall, the undertone remained up-beat after the government allowed India’s largest insurer Life Insurance Corporation (LIC) to invest up to 30 percent in a company as against the earlier limit of 10 percent. Sentiments also got supported after banking space spurted over half a percent on hopes that the winter session of parliament will pass bills to liberalize the insurance, pension and banking sector. While, State run public bank and also index heavyweight, State Bank of India (SBI) scooped up gains on likely capital infusion. Global cues also supported the sentiments as European counters advanced for a fourth straight session to touch a one-week high on Thursday on hopes that a deal on Greece’s bailout will be agreed. Back home, rally in metal stocks too backed the investors’ emotions as stocks like, Hindalco, JSW Steel, Sesa Goa, SAIL, Sterlite Industries and Tata Steel all edged higher on preliminary results from a factory survey showed that China’s vast manufacturing sector saw expansion accelerate in November for the first time in 13 months. Further, telecom stocks, namely, Reliance Communication, Bharti Airtel, Idea Cellular and MTNL, rang-loud after Planning Commission Deputy Chairman Montek Singh Ahluwalia, a week after flop 2G spectrum auction, accepted that it was a mistake to fix such a high reserve price for the 2G spectrum auction, which kept leading telecom companies away from the bidding. However, the gains remain capped as shares in drug-makers dipped on speculation the government’s final decision on the pricing policy for the sector might be more disruptive than expected. Finally, the BSE Sensex gained 56.96 points or 0.31% to settle at 18,517.34, while the S&P CNX Nifty rose by 12.95 points or 0.23% to end at 5,627.75.