Indian markets to continue the upmove with a gap-up start

The Indian markets made a jubilant start of the year 2013 and the major indices surged by about a percent supported by the positive cues from the US. Today, the start is likely to remain cheerful as the major Asian peers are trading with good gain. Traders will be eyeing the HSBC India Manufacturing PMI data to be released later in the day. India's manufacturing sector growth improved in November, registering the fastest pace in five months. There will be buzz in the jewellery stocks, as the government has slashed the import tariff value of gold and silver marginally to $ 539 per 10 gm and $979 per kg, respectively. The Auto companies too will be reacting to their sales numbers of December, as despite offering year-end discounts major car makers either posted a drop or a marginal increase in sales. There will be some action in PSU stocks too after government initiated the process of appointing merchant bankers for managing the 12.5 per cent stake sale in Rashtriya Chemicals and Fertilisers.

Most of the global markets remained closed on Tuesday on account of New Years day, however currently there was voting going on in the US House toward giving its approval to the bipartisan, Senate-passed legislation to handle the most severe consequences of the "fiscal cliff". Most of the Asian markets have made a strong start after a day of break, as the US Congress was likely to get final go to avoid triggering tax rises and spending cuts.

Back home, key domestic benchmarks put-up a fascinating show when most of the world markets were closed on the beginning of the New Year. Though volume-wise it wasn’t a great day, price-wise the Mid-cap and Small-cap stocks celebrated the first trading day of the year. The rally was mainly supported by interest rate sensitive sectors like banking and real estate, which remained on buyers’ radar on optimism of Reserve Bank of India (RBI) easing monetary policy this month. The indices traded with decent gains till noon, but post noon the benchmarks turbo-drove and snapped the session above their crucial 5,950 (Nifty) and 19,550 (Sensex) mark after the Senate moved the US economy back from the edge of a 'fiscal cliff' on Tuesday. Back home, rally in metal counter too supported the sentiments as stocks like Hindalco, Jindal Steel, Tata Steel, Sterlite Industries and Sesa Goa edged higher on upbeat Chinese manufacturing data from HSBC. Auto counters too traded with traction and garnered gains of about a percent after Mahindra & Mahindra registered decent gains in December sales. The company reported 6 per cent growth in domestic sales at 42,307 units in December 2012, compared with 39,891 units sold during the same month a year ago. Meanwhile, Goldman Sachs has forecasted the repurchase rate, held at 8 per cent since April, to be lowered to 7.5 per cent at the next monetary policy review on January 29, while BNP Paribas SA sees a 25 basis point reduction. Some strength also came in after Indian rupee stabilized further against the American currency in the late morning trade by surging 24 paise to 54.75 per dollar on persistent selling of dollar by banks and exporters on the back of sustained capital inflows despite firm dollar overseas. Sentiments also got some support from report that Centre’s fiscal deficit though exceeding 80 per cent of the Budget target in the first eight months (April-November) remained slightly better than the numbers recorded during same period in 2011-12. However, gains remained capped up to certain extent 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. Finally, the BSE Sensex gained 154.10 points or 0.79% to settle at 19,580.81, while the S&P CNX Nifty rose by 45.75 points or 0.77% to end at 5,950.85.