Markets likely to get a positive start on supportive global cues

The Indian markets went through a choppy trade in last session, though the benchmarks managed to eke out some gains in the final hours but some individual and mid-cap stocks remained under pressure. Today, the start is likely to remain positive on supportive global cues, however the trade may remain range bound lacking any major upside trigger. There will be some cautiousness related to the global economy as the IMF chief Christine Lagarde  has warned of threats ahead and has said that the world’s major economies including Europe, the US and Japan need to get their house in order. On the domestic front the telecom stocks will keep buzzing as in a bid to increase the average realisation per minute the telecom companies have started increasing their effective tariffs. The beleaguered aviation sector will again be under pressure, as the Supreme Court has restrained the Federation of Indian Airlines from levying a transaction fee, in any form or in any name, while booking tickets and has directed the Directorate-General of Civil Aviation to examine the tariff structure of the airlines in view of the wide range of their base prices.There will be buzz in the fertilizer sector too, as the government has constituted a Group of Ministers (GoM) to look into urea pricing.

Also, there will be lots of important result announcements, Andhra Bank, Ashok Leyland, Biocon, Dhanlakshmi Bank, L&T, Prism Cement, Sesa Goa, Sun Pharma Adv, etc will be announcing their numbers.

The US markets continued their gaining momentum on Wednesday with S&P 500 extending its winning streak to six days on the back of stronger-than-expected profits from IBM and Google which eased investor concerns about the technology sector and news that the House voted to approve a bill that would temporarily suspend the US debt limit for nearly four months.Most of the Asian markets are trading in green in early trade after China reported that its manufacturing expanded at the fastest rate in two years. The Japanese market too was trading higher despite yen paring gains after country’s exports fell more than forecast and the annual trade deficit swelled to a record.

Backhome, key domestic benchmark witnessed consolidation with both the frontline indices managed to keep their head above water on Wednesday. Buying which emerged in late trade, largely supported by recovery in European markets after a sluggish start, mainly acted as saving grace for domestic equity markets and helped them to re-conquer crucial 6,050 (Nifty) and 20,000 (Sensex) levels. Earlier, market made a positive start after Finance Minister P Chidambaram encouraged foreign investors to put their money in India, promising a conducive environment, besides a stable tax regime, lower fiscal deficit and high economic growth. Chidambaram’s efforts to present India as an investor-friendly country has come a little over a month before the Union Budget and a few days after Moody’s Investors Service reaffirmed a stable outlook on India’s sovereign ratings. Sentiments took u-turn with both the indices entering into the red in noon trade as profit booking emerged at higher levels amid sluggish opening in European counters. But, hefty buying in dying hours helped the gauges to snap the session in the green. The recovery was seen on the back of revival in European markets triggered by upbeat corporate earnings and a better outlook for the global economy. Back home, stocks from banking sector remained on the buyers’ radar on revived hopes of rate cut on reports suggesting Finance Minister P Chidambaram insisting Reserve Bank of India (RBI) for striking a balance between needs of pushing growth and controlling inflation. RBI is slated to announce its third quarter review of monetary policy on January 29 amid demands by the industry that it should lower interest rates to boost industrial output, which contracted by 0.1 per cent in November.  Some strength also came in from telecom sector as stocks like Bharti Airtel, Idea Cellular and Reliance Communication edged higher after leading telecom operators, including Bharti Airtel, increased rates of special tariff vouchers and reduced free minutes usage, barely a month after hiking the price of 2G data plans. Finally, the BSE Sensex gained 45.04 points or 0.23% to settle at 20,026.61, while the S&P CNX Nifty rose by 5.80 points or 0.10% to end at 1,369.90.