Markets likely to get a flat-to-positive start

The Indian markets extended their gains on Tuesday on getting some sentiment boost with a deal between two Ambani brothers. Today, the start is likely to be flat-to-positive and markets may strengthen as the trade proceeds. The Sugar sector that remained buzzing last session is likely to give up some gains as the Cabinet Committee on Economic Affairs (CCEA) on Tuesday did not take up the proposal to decontrol the sugar sector, as Finance Minister P Chidambaram is away on a foreign tour. On the other hand the real estate sector will be in action today, as a decision on setting up a real estate regulator with stringent punishment, including jail term for private developers and builders for cheating homebuyers by misleading advertisements was deferred. The markets are also likely to get some support with the Finance Ministry notifying an eight-member panel under Economic Affairs Secretary Arvind Mayaram for giving clear definitions to FDI and FII, a move aimed at removing ambiguity in the types of foreign investments.

The US markets bounced back on Tuesday with the Dow and the S&P 500 closing at new record highs. Good factory orders data and surge in the health insurance stocks led the markets higher for the day.The Asian markets have made a mixed start; the Japanese market has surged on good economic report from US and as two days Bank of Japan’s meeting begins.

Back home, domestic benchmarks, extending the winning momentum for four back to back sessions, snapped the Tuesday’s trade with a gain of about a percent with both the frontline bourses recapturing their crucial 5,700 (Nifty) and 19,000 (Sensex) levels. After a choppy start, markets gained strength as sentiments got support from Finance Minister P Chidambaram’s statement that the Indian economy is capable of absorbing $50 billion foreign direct investment (FDI) annually. Domestic gauges extended their bull run supported by buying in Anil Dhirubhai Ambani Group (ADAG) stocks, viz. Reliance Industries, Reliance Communication, Reliance MediaWorks and Reliance Capital, after Reliance Jio and RCom reportedly signed Rs 1,200 crore agreement for sharing RComm optic fibre network.  Besides, positive global cues too aided the sentiments as European counters edged higher in early deals. Back home, sentiments remained jubilant after consumer confidence levels rose in March owing to improved spending behaviour coupled with stable employment situation. The BluFin’s Consumer Confidence Index (CCI) rose to 41.8 points in March, an increase of 1.1 points from the preceding month. Investors’ confidence also got some boost after foreign institutional investors (FIIs) bought shares worth a net Rs 313.07 crore on April 1, 2013. Buying in oil and gas counter mainly supported the sentiments with RIL and Cairn India surging between 2-3 percent each. Auto space, after a negative start, too ended in green after oil marketing companies cut petrol prices by a rupee from April 2, 2013. Sentiments also got some support after shares of sugar manufacturer viz. Bajaj Hindustan, Shree Renuka Sugars, Balrampur Chini Mills, Rana Sugar and Dhampur Sugar Mills edged higher on hopes that the government may soon remove some curbs on the tightly control sector. Finally, the BSE Sensex gained 176.20 points or 0.93% to settle at 19,040.95, while the CNX Nifty rose by 43.70 points or 0.77% to end at 5,748.10.