Indian markets to get a positive start of the New Year

The Indian markets remained in a subdued mood in last session on US concerns and after a range bound trade closed marginally lower on the last trading session of the year. However, the Indian equity markets made their mark in 2012 by becoming the best performing markets in the region. Today, the start of the New Year is likely to be good, though Asian peers are not trading but the jubilation of US averting the fiscal cliff is likely to be seen on the Indian bourses too. Though, there is not very good news from the domestic economy front, as the eight core industries witnessed a slow growth of 1.8 per cent in November against the eight-month high of 6.5 per cent seen in the previous month, signaling a similar softness in the IIP data to be released later in the month. Traders may take some support with the report of Centre’s fiscal deficit exceeding 80 per cent of the Budget target in the first eight months (April-November), slightly better than the numbers recorded during same period in 2011-12.  Auto stocks will be buzzing with monthly sales data for December 2012.

The US markets surged on the last trading day of the year, making it one of the strongest days in more than a month. A last minute deal was reached to avert the “fiscal cliff”. President Barack Obama and Republican Senate leader Mitch McConnell issued statements indicating a deal. All the major Asian markets are closed today on account of New Year day.

Back home, Indian benchmark equity indices concluded the last trading session of calendar year 2012 on a disappointing note but garnered massive gains of over 25 per cent on annual basis. Today, frontline indices ended the lackluster session on a quiet note tad below their neutral lines in absence of buying interest as US lawmakers failed to reach a deal to avert a fiscal crisis. However, the psychological 19,400 (Sensex) and 5,900 (Nifty) levels proved as strong support levels as the key indices despite repeated attempts refused to go substantially below those levels as rate sensitive like realty, banking and auto stocks surged after RBI indicated that in view of the likelihood of inflation moderating further, it could go in for a rate cut in its third quarter policy review on January 2013. Global cues remained sluggish after European markets opened lower as worries over US budget negotiations dominated the trading mood after policy makers failed to reach an agreement over the weekend. Back home, macro-economic data also prompted some profit-booking at D-street. India’s fiscal deficit during the April-November period was 4.13 trillion rupees, or 80.4 percent of the budgeted full fiscal year 2012/13 target. However, during the same period in the previous fiscal year, the deficit was 85.6 percent of the budget target. Some selling also came in after IT stocks like HCL Tech, TCS and Mphasis ended mostly lower amid concerns about upcoming US fiscal cliff. Moreover, FMCG counter too ended in the red despite the Ministry of Agriculture reporting that the sowing of Rabi or winter crop has picked up. As per the latest reports, sowing of coarse cereals and oilseed crops is on higher side. However, the losses remain capped as Metal stocks edged higher on upbeat Chinese manufacturing data from HSBC. Some amount of support also came in from Oil and Gas shares which surged on report that natural gas producers like Reliance Industries (RIL) should be allowed to charge market prices, the Plan for next five years adopted by the nation’s highest planning body, headed by the Prime Minister. Finally, the BSE Sensex ended lower by 18.13 points or 0.09% to settle at 19,426.71, while the S&P CNX Nifty declined by 3.25 points or 0.06% to end at 5,905.10.