Markets to make a flat-to-positive start of the day

The Indian markets showed smart pullback in last session and the major indices moved higher on rate cut hopes despite an increase in the WPI inflation numbers. All the rate sensitives’ remained in action and pulled the markets higher from the lows of the day. Today, the start is likely to be in green and the markets may extend their gaining momentum on sanguine global cues, though traders will be eyeing the fourth quarter advance tax numbers to gauge the health of the companies and scrip specific actions can be seen on the basis of the advance tax numbers. Meanwhile, raising optimism, Standard & Poor’s has pegged India’s FY’14 GDP growth at 6.4 percent and said it may upwardly revise outlook on the sovereign rating if the government continues to focus on policy initiatives. However, there is likely to be some cautiousness too, as the chief economic advisor Raghuram Rajan has said that it was too early to say that the economy had recovered despite the improvement in some key numbers. Meanwhile, the banking stocks will keep buzzing, as the Reserve Bank of India has begun a probe into allegations that staff at Axis Bank, HDFC Bank and ICICI Bank encourages customers to evade income-tax payments and siphon off funds overseas. There will be some action in media stocks too, as the Minister of Information and Broadcasting, Manish Tewari has said that the government will facilitate and play a key role for rapid Media & Entertainment growth in India.

The US markets strengthened further on Thursday with the Dow closing higher for the tenth consecutive session, on getting report of unexpected drop in initial jobless claims in the week ended March 9, aiding to recent optimism about the labor market. The Asian markets have made a mixed start; Japanese market has taken the lead after the Japan’s upper house confirmed Haruhiko Kuroda as governor of Bank of Japan. However, the Chinese market along with few others was trading in red, heading for another weekly loss.

Back home, boisterous benchmarks, snapping three consecutive sessions of downfall, showcased an enthusiastic performance on Thursday by rallying a percentage point. Despite an initial collapse, on reports that some banks are involved in money laundering, markets witnessed an exceptional bounce back and there appeared not even an iota of profit booking as the benchmarks managed to fervently gain from strength to strength as investors continued hunt of fundamentally strong but oversold stocks. Frontline indices managed to finish the session near intraday high settling above 5,900 (Nifty) and 19,550 (Sensex) levels as investors took to hefty across the board buying. The key indices extended their gains as investors continued piling up positions in rate sensitive counters on rate cut hopes despite high inflation data for the month of February. The Wholesale Price Index (WPI) for the month of February rose to 6.84 per cent versus 6.62 per cent in January. The upward pressure on inflation was mainly from Fuel & Power, which rose 3% for the month due to higher prices of LPG, furnace oil, lubricants and high speed diesel. Major support to the markets came in from rally in banking stocks like ICICI Bank, HDFC Bank and Axis Bank, which got relief after clarifying to the sting operation report, stating that they conducts business with the highest level of compliance to legal and regulatory requirements. Recovery in most of the Asian equity indices also supported the domestic bourses. Positive opening in European counters too buttressed the domestic sentiments. Back home, some strength to the markets also came in after public sector oil marketing companies like BPCL, HPCL and IOC edged higher on reports that diesel price may be hiked by 40-50 paise per litre from March 15/16. However, it was also reported that petrol price may be slashed by Rs 1 per liter. The infra stocks too remained on the buyers’ radar after the Supreme Court allowed delinking the two clearances as sought by the Ministry of Environment and Forest (MoEF). Finally, the BSE Sensex surged 207.89 points or 1.07% to settle at 19,570.44, while the CNX Nifty climbed by 57.75 points or 0.99% to end at 5,908.95.