Markets to get a positive start of the new series

The Indian markets went for a remarkable expiry of the April series. Supported by huge short covering and investor’s optimism, markets added strength of over a percent in last session. Today, the start of the new series is likely to be on a positive note. Traders are expected to keep their optimism high for a rate cut in RBI’s upcoming monetary policy review. Also, there will be some encouragement with the government pitching for a rating upgrade at a meeting with ratings agency Standard & Poor's. Officials have argued the outlook should be changed, and the country deserved an upgrade for actions taken by the government to put finances in order and bolster investor confidence. The Aviation stocks which were in jubilant mood last session are likely to keep their spirit high with passenger traffic in March expanding for the first time in 10 months, although by a slender 1.59%. There will be some buzz in the oil & gas, power and fertilizer sector too, as the Rangarajan panel recommendation of pricing natural gas at an average of international gas hub prices has not found support with user ministries of power and fertiliser as well as the finance ministry. There will be lots of important result announcements too, along with result reactions of Idea and JSPL, which came after market hours.

The US markets recovered from the consolidation mood and all the major indices closed modestly higher on some latest earnings reports as well as some upbeat employment data. The Asian markets have once again made a mixed start with some of the indices trading marginally in red. Japanese market has given up its early gains ahead of the Bank of Japan’s meeting today.

Back home, the April series Futures and Options contract settlement turned out to be an encouraging event for the Indian markets as bulls showed strong buying fervor blue chip stocks. Hefty short covering in the dying hours ahead of the series expiry further stoked the benchmarks to settle around the high point of the day. The resilient markets vivaciously rallied over 571.08 (Sensex) and 233.75 (Nifty) points during the series, conquering 19,400 (Sensex) and 5,900 (Nifty) bastions. Sentiments remained jubilant from the start of the trade as sentiments got boost from Finance minister P Chidambaram’s statement to reach out to the main opposition BJP and other political parties seeking their support to get crucial legislations approved in the ongoing budget session. He has said that the government is keen to get the insurance, food security and land acquisition legislations approved by Parliament to sustain the reform momentum. Sentiments also remained upbeat as investors expect that the Reserve Bank of India will cut interest rates by 25-50 basis points on May 3, 2013 in its monetary policy meet as WPI inflation eased to 3-year low in March. Markets also remained in comfort zone after the Finance Ministry has pitched for rating upgrade with Standard & Poor’s. At present, India has a sovereign rating of ‘BBB-’ which is the last investment grade. Last August, the rating agency revised the outlook on India’s long-term credit rating to ‘negative’ from ‘stable’. Sentiments in the domestic markets remained euphoric after Prime Minister’s Economic Advisory panel Chairman C Rangarajan said that India has ability to grow at 8 percent without fuelling inflation. He said ‘with an investment rate in the range of 32-35 percent, there is a potential growth rate of 8 percent in the economy and it is possible to grow at that rate even without provoking high level of inflation’.  Sentiments also got some boost from rally in Aviation pack. Stocks like Jet Airways, Spicejet, and Kingfisher Airlines edged higher on report that India has agreed to enhance seat entitlements to and from Abu Dhabi multiple times despite political opposition. Finally, the BSE Sensex surged 227.49 points or 1.19% to settle at 19406.85, while the CNX Nifty climbed by 79.40 points or 1.36% to end at 5,916.30.