Markets likely to remain in a cheerful mood tailing global markets

The Indian markets extended their pullback rally for the third straight day in the last session. Today, the start is likely to remain good and traders will be taking strength with Moody’s Analytics, an arm of the global ratings agency Moody's forecast that economic growth in 2013 will be 6.2% from 5.1% in 2012. It said that the worst may be over for the Indian economy with the December quarter likely the bottom of the economic cycle. There will be buzz in the banking and power sector stocks, as the two major banks of the country, SBI and ICICI Bank have criticised the draft of the new standard bidding document (SBD) for the power sector. There has been concern raised about eight changes introduced to SBD, including the introduction of the capacity charge as a bid criterion. The telecom sector too may remain buzzing after the government trashed allegations by mobile phone companies that it had extended 'undue benefits' to Mukesh Ambani's Reliance Industries by allowing 4G spectrum holders to offer voice calls to customers by paying an additional Rs 1,658 crore for a pan-India licence.

The US markets ended in green on Thursday on getting an upbeat weekly jobless claims report and ahead of the widely-watched monthly government jobs data. Declining for the second straight week, jobless claims fell 7,000 to a seasonally adjusted 340,000. However, the trade deficit widened to $44.4 billion in January from a revised $38.1 billion in December. The Asian markets have mostly made a jubilant start, tailing US markets, while the Japanese market has taken the lead surging by over two percent as revised fourth-quarter gross domestic product figures of the country showed the economy returned to growth. The Chinese market was in a bit somber mood ahead of the trade data release.

Back home, Thursday turned out to be a tremendous session of trade for the Indian equity markets with both the domestic gauges snapping the session at high point of day’s trade, re-capturing their crucial 19,400 (Sensex) and 5,850 (Nifty) levels. Aided by buying in last leg of trade in stocks of Realty, Capital Goods, Software and Technology counters, the bourses not only recuperated all the losses but also allured massive gains of over three percent in three consecutive sessions. Though, the frontline indices traded lackluster for most part of the day’s trade due to profit-booking by funds and retail investors after two days of massive rally. But, the domestic markets picked up the pace in late trade following firm opening in European counters, pushing major indices to near multi-year highs and with investors forecasting more gains in the medium term. Back home, some support also came in from Prime Minister Manmohan Singh’s statement that the economy has faced a difficult situation in the past year but the government aims to achieve an average growth of eight percent during the 12th Five Year Plan. Sentiment also got some boost by data showing that foreign funds remained net buyers of Indian stocks on March 6, 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 524.05 crore on March 6, 2013. Appreciation in Indian rupee against dollar too supported the sentiments. The rupee recovering from initial losses appreciated by twelve paise at 54.59 on mild dollar demand from banks and importers on the back of firm global cues.  Sentiments also got some strength as market-men kept themselves busy in buying stocks from software counter as the latest economic data from US added to optimism for a gradual recovery in the US economy, the biggest outsourcing market for the Indian IT firms. Banking counter too boosted the investors’ confidence as stocks like Axis Bank, ICICI Bank, HDFC Bank, SBI, PNB, Union Bank and Yes Bank all edged higher amid optimism that the Reserve Bank of India (RBI) may cut interest rates in March policy to boost growth. On the flip side, telecom stocks like Idea Cellular, Bharti Airtel and Reliance Communication edged lower as there was no decision on the timeline for the third round of auctions and further reduction in auction prices. Finally, the BSE Sensex gained 160.93 points or 0.84% to settle at 19,413.54, while the CNX Nifty rose by 44.70 points or 0.77% to end at 5,863.30.