New series to get a positive start; GDP data eyed

The Indian markets surged for the second straight day in last session and snapped the November series with gains of over 2%, while the major indices jumped to over one and half year high. Today, the start of the new series is likely to be on a positive note on strong global cues. Traders will be eyeing the Q2 GDP data on the domestic front, to be released later in the day, though it is being estimated that growth likely hovered near a three-year low in the last quarter, Finance Minister P. Chidambaram had said last week that growth was about 5.5 per cent in the three months to the end of September. Anything coming between 5.3-5.5% may not impact much on the negative side, though the lower numbers than that may put a break to the momentum of the markets. The telecom sector will be under pressure after the Supreme Court directed the Central Bureau of Investigation (CBI) to proceed further, based on its Director’s decision to take action against telecom companies and individuals for alleged irregularities in allocation of additional spectrum from period 2001 to 2007. There will be some buzz in the sugar sector too, as the Food Ministry has decided to put on hold its proposal to hike retail price of sugar sold through the ration shops.

The US markets made a positive close on Thursday, though the uncertainty kept looming in the minds of investors regarding the fiscal cliff, but the indices moved higher on hopes that the government will reach a deal, also there were some good economic news that supported the markets. The Asian markets have made a green start as Japan’s cabinet approved a second economic stimulus package, while on the same time nations’ industrial production unexpectedly increased since December.

Back home, the tepid looking November series that remained range-bound throughout the month and was bound to get a flat expiry, unexpectedly showed a trend reversal in last two trading session to end with decent gains, both the benchmarks were up by over 2% for the series, while the mid and small cap indices too gained over two and one percent respectively. The gush of short covering was so high that the markets inched to their new high, with Nifty closing above 5,800 mark for the first time in 2012, its highest level while the BSE Sensex missed the 19,200 mark by a narrow margin. Total market turnover too reached to their lifetime high of 3.92 lakh crore. The markets looked firm since beginning and gathered momentum as the trade proceeded, there was an enthusiasm as the impasse in the Parliament ended after the Speaker fixed the date for a debate and vote on the issue which will take place on December 4 and December 5. Not only this, traders took cues from the report of investment banker Goldman Sachs upgrading India to overweight from market-weight, saying that it expects the country's economic growth to be ‘relatively strong’ over the next year.  On the economy front there was not much, Prime Minister's Economic Advisor Council Chairman Dr C Rangarajan said that the though government has pegged that the current account deficit during this fiscal will be at 3.5 per cent of the GDP, but it was much higher than the expected levels and there was need to bring it down at 'moderate levels'. The global cues too remained supportive for the domestic markets, after the positive closing of the US markets, most of the Asian markets too remain relaxed on rising hope of US government reaching a budget deal. Back home, though the broader markets too remained active but the large cap stocks kept buzzing for the day and barring few, most of the components of the benchmark indices registered good gains taking the markets to new highs. Rate sensitives’ were in the most jubilant mood and Realty index on the BSE once again surged by over 3%, closely followed by banking and auto indices which garnered gain of over 2% each. The PSU sector too gained over a percent after the government reported that it has raised Rs 932 crore through disinvestment in PSUs during the current fiscal and is working towards achieving the Rs 30,000 crore target set for the year. There was some weakness in the IT and technology counters, as the rupee appreciated against dollar and surged to its one week high. Finally, the BSE Sensex rallied 328.83 points or 1.75% to settle at 19,170.91, while the S&P CNX Nifty jumped by 97.55 points or 1.70% to end at 5,825.00.