Markets to remain in jubilant mood on sanguine global cues

The Indian markets witnessed a complete trend reversal in the latter half of the trade and after plunging into red, ended near the high point of the day. Broad based buying was seen after a series of decline and traders took opportunity for short covering at lower levels. Today, the start is likely to be in green and the markets may extend their gaining momentum on euphoric global mood. Meanwhile, the Finance Ministry is readying itself to convince international rating agencies-Fitch, Standard & Poor’s and Moody’s- that the Indian economy is on a strong recovery path. Last year, the three agencies were a bit liberal in their criticism of India’s macro-economic fundamentals and precarious public finances. The power sector is likely to remain buzzing, as the Power and Coal ministries will again meet in the next couple of days to come up with the "best possible" model for price pooling of imported and domestic coal.  Also, Power Minister Jyotiraditya Scindia is seeking top priority for generation stations in allotment of domestic gas and wants change in gas allocation priority. There will be buzz in the telecom sector too, as the Supreme Court will be hearing the case of intra-circle 3G roaming pacts. 

The US markets went for a big rally on Wednesday that lifted S&P 500 to a new record intraday high. Traders got support by the minutes of the latest Federal Reserve meeting, which suggested that the central bank will maintain its asset purchase program at the current pace until at least the middle of the year. Also, there was a boost with report of surge in Chinese imports. The Asian markets have made a jubilant start and most of the indices are showing good gains after Bank of Japan Governor Haruhiko Kuroda said the central bank will take all steps necessary to meet a 2 percent inflation target.

Back home, relief rally finally came on Wednesday as market-men enthusiastically resorted to hunt for undervalued fundamentally strong bargains amid firm global cues. The bounce back came after five successive sessions of downtrend in which the BSE’s Sensex suffered a massive loss of close to six hundred and fifty points while the NSE’s Nifty suffered staggering losses of around one hundred and ninety points as continuous political uncertainty over early elections kept the investors mood jittery, while the foreign funds kept on selling, adding further pressure on the markets. The sentiments remained positive since the start of trade with the Planning Commission Deputy Chairman Montek Singh Ahluwalia reiterating that India can get back to 8 percent GDP growth with improved infrastructure. Markets soon, after a gap up opening, pared most of their initial gains and traded cautiously tad above their neutral lines for most part of the session as investors remained on the sidelines focusing on Infosys results later this week. Though, it was the last hour of trade where market picked up pace and garnered gain of around a percent, recapturing their crucial 5,550 (Nifty) and 18,400 (Sensex) bastions. Broad-based buying came in after European counters opened firmly following unexpectedly good French production data. Back home, over two percent rally in software and technology counters helped market to end near intraday high. Stocks like Infosys, Wipro, HCL Technologies and TCS edged higher after Gartner survey stated that a majority of large Indian enterprises are planning to increase their IT spending this year. Auto sector too witnessed buying despite report that car sales in India fell an annual 6.7% in the financial year that ended in March, their first fall in a decade. Domestic passenger car sales declined by 22.51% to 180,675 units in March this year compared to 233,151 units in the same month of 2012. Finally, the BSE Sensex surged 187.97 points or 1.03% to settle at 18,414.45, while the CNX Nifty climbed by 63.60 points or 1.16% to end at 5,558.70.