Markets to get a positive start on supportive global cues

The Indian markets continued their rally mood before going for a long weekend and the BSE benchmark Sensex closed above the 19000 mark after a long time. There was some positive news for the economy along with some good earnings that boosted the morale of the investors. Today is the start of the holiday shortened F&O series expiry week and the trade is likely to remain volatile. Though, the start today is going to be in green, tailing positive global cues. Traders will be eyeing the development in the commodity markets, particularly gold and crude Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan has said that sharp decline in gold prices will have favourable impact on the economy especially the high current account deficit (CAD) and the overall Balance of Payment (BoP) position. Meanwhile, Prime Minister Manmohan Singh has stressed the need for increasing investment across sectors and creation of an enterprise and investment-friendly climate. Today, the power companies too will remain in action, as the government is likely to take a final decision on the blending of prices of imported coal and domestically-produced fuel or price pooling of coal.

There will be some important result announcements too, to watch. Cairn India, Mahindra Lifespace and Ultratech Cement, Swaraj Engines and Tata Sponge will be the majors to announce their numbers.

The US markets closed marginally higher on Friday, though the earnings remained mixed but traders went for buying ahead of the weekend and helped the markets trim some losses of the week. Most of the Asian markets have made a positive start led by the Japanese index Nikkei, which surged around two percent in early deals as yen slipped to four years low boosting the exporters.

Back home, energetic benchmarks witnessed an enthusiastic performance by rallying over one and a half percentage points and breaking a lot of psychological levels in their bull run on Thursday. There appeared not even a bit of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued to hunt for fundamentally strong but oversold stocks. Frontline indices managed to finish the session near its intraday high and settled above 5,750 (Nifty) and 19,000 (Sensex) bastions as investors took to hefty across the board buying. Investor’s risk-appetite was firm after prices of global commodities such as Brent crude and gold slipped further, which will help to reduce the burgeoning current account deficit (CAD). Sentiments also got a boost after country’s trade data showed that the exports grew for the third month in a row, rising by 6.97% in March though on an annual basis it declined 1.76% to $300.6 billion in 2012-13. Exports in March increased to $30.8 billion compared to $28.8 billion in the same month of previous year. Rally in rate sensitive too buttressed the sentiments as stocks from banking, realty and auto counters extended recent gains triggered by expectations that the Reserve Bank of India (RBI) will cut its key policy rate viz. the repo rate to boost growth amid slowing wholesale price inflation. Jubilation continued in the noon deals after Commerce Minister Anand Sharma announced a slew of measures including extension of the popular EPCG scheme to all sectors and sops for Special Economic Zones (SEZs) to boost shipments. Firm opening in European counters too provided support to the local bourses with CAC and DAX surging by over half a percent in early trade. Back home, markets continued its positive trade supported by buying in export oriented stocks like Shree Ganesh Jewellery House and Rajesh Exports.  Rally in energy sector too aided the sentiments as Prime Minister Manmohan Singh has pitched for subsidies for clean energy saying market forces alone would not be able to finance it. FMCG stocks too remained on the buyers’ radar on expectation of normal rains in the country; the rain is expected to be 103% of the season's average of 89 cm. The sentiments also buttressed with the rally in mining stocks, viz. Kalyani Steel, JSW Steel and Sesa Goa, after Supreme Court lifted a one-and-a-half-year old iron ore mining ban in Karnataka. Stepping back from its stance on imposing a total ban on mining in Karnataka State on account of environmental concerns, SC cleared the long awaited verdict on the Category B iron ore mining in Bellary district of Karnataka. Finally, the BSE Sensex surged 285.30 points or 1.52% to settle at 19,016.46, while the CNX Nifty climbed by 94.40 points or 1.66% to end at 5,783.10.