Markets likely to get a gap-up start after a day of break

The Indian markets lost their momentum in second half of last session and though the other markets recovered, the local markets succumbed to profit booking at higher levels. Today, the start is likely to be a gap-up one as the other global markets have been moving higher for the last three days and domestic markets will catch-up with them after a holiday. The PSU oil companies are likely to be in somber mood as not only the international crude prices have surged but also on reports that government is scrutinizing low refining margins of its state-run oil firms and may go tighten its spending on subsidies. The commodities stocks are likely to move higher in tandem with their global counterparts. Also, the telecom companies are likely to come under pressure as the government is mulling over allowing nation-wide free roaming as per draft New Telecom Policy 2011. Besides, the Telecom Ministry is also planning to allow inter-circle Mobile Number Portability (MNP), changing operator while retaining same number in different circles.However, markets may get some positive sentiments with the Sebi reviewing the impact on the stock market turnover from a possible scrapping of STT.

The US markets moved in positive territory for the third straight day on Thursday as the European Central Bank agreed to provide unlimited one-year loans to the region's banks through 2013. Traders were also anticipating stronger-than-expected employment figures when the US Labor Department issues its September jobs report Friday morning. The Asian markets have made a jubilant start and most of them are trading higher by over a percent in early trade, latest development in Europe has boosted the outlook for lenders and exporters in the region.

Back home, Indian benchmarks indices extended the sorrow of closing in the red territory for the fourth consecutive session and this time they only have the domestic leads to blame as most global markets rebounded in the day, especially the European ones. After, trading on a sanguine note through the morning trades, the frontline indices were caught amid high amount of volatility and optimism soon made way for cautiousness in the second half of trade. The selling pressure in domestic markets intensified in the noon trades despite the sharp rally in European markets as shares in the financial sector there were boosted by reports that European Union finance officials were looking at a bank recapitalization plan. However, back home the rate sensitive banking pocket continued to exert serious amount of pressure on the key indices for the second straight session after reports of a downgrade by global rating agency Moody’s. Apart from SBI, majors like ICICI Bank, Axis and HDFC too bore the brunt of hefty selling pressure on concerns of deteriorating asset quality. Earlier on Dalal Street, the benchmark got off to a positive start as the indices rebounded after the recent sell-offs following the strong overnight bounce back on Wall Street on the back of reports that European leaders were working on ways to help banks with recapitalization. The key indices remained choppy through the morning trades but saw a sudden spurt in buying in early afternoon trades post the sanguine European market opening. However, the frontline gauges met with severe resistance around the psychological 4,800 and 16,000 levels as hefty bouts of profit booking brought about a steep and nasty laceration on the bourses. Thereafter, the indices recuperated after hitting intraday lows but only to once again drift below the neutral line and settle on a negative territory around session’s lowest levels. Eventually the NSE’s 50-share broadly followed index Nifty, took a cut of about half a percent to settle above the crucial 4,750 support level while Bombay Stock Exchange’s Sensitive Index Sensex slipped by over seventy points and closed below the psychological 15,800 mark. Moreover, the broader markets too succumbed to the selling pressure and closed with losses of about a percent. On the BSE sectoral space, the rate sensitive - bankex and PSU pockets remained among top laggards in the space as they got lacerated by 2.52% and 0.67% respectively. While sectors like Consumer Durables and Oil & Gas too got pounded in the session. On the flipside, the defensives like Healthcare and FMCG along with high beta Realty managed to go home with moderate gains of over half a percent. Finally, the BSE Sensex lost 72.45 points or 0.46% to settle at 15,792.41, while the S&P CNX Nifty declined by 20.85 points or 0.44% to close at 4,751.30.

The US markets closed higher for a third straight day on Thursday, sending the Dow industrials back above 11,000, as Europe stepped up efforts to bolster its banks and jobless claims rose less than expected. European Central Bank President Jean-Claude Trichet stated that ECB will resume covered-bond purchases and reintroduce year long loans for banks, while defying calls for an interest-rate cut and acknowledging the intensified downside risks to the economy. The European Commission is pushing for a coordinated capital injection for banks to shield them from the fallout of a potential Greek default.

Also, the US Labor Department stated that the first-time applications for jobless benefits last week rose by 6,000 to 401,000, as and the four-week average dropped to 414,000. Separately, President Barack Obama urged Congress to move quickly and pass his jobs bill, that would help protect the economy from another downturn should Europe’s debt troubles worsen. Obama’s proposal involves cutting payroll taxes for employers and employees, hiking expenditures for improving roads and other public-works projects and extending aid to states for education and emergency workers. Also, US Treasury Secretary Timothy F. Geithner told the Senate Banking Committee that there is absolutely no chance of another US financial institution collapsing like Lehman Brothers.

The Dow Jones industrial average gained 183.38 points, or 1.68 percent, to 11,123.30. The Standard and Poor’s 500 closed higher by 20.94 points, or 1.83 percent, to 1,164.97, while the Nasdaq composite gained 46.31 points, or 1.88 percent, to 2,506.82.

Crude prices surged on Thursday as Europe moved closer to help the region's troubled banks and as US jobless benefit claims rose less than expected last week which raised optimism over petroleum demand. The crude prices declined in early trade after the European Central Bank decided to leave interest rates unchanged, but then its indication that it would engage in a form of quantitative easing by buying EUR40 billion in bank bonds led the prices to surge in late trade.

Meanwhile, the Middle East crude market rose after Saudi Arabia raised official selling prices (OSPs) for at least two grades to record highs in Asia.

Benchmark crude for November delivery rose $2.91, or 3.65 percent, to settle at $82.59 a barrel, after trading in a range from $79.08 to $82.90 on the New York Mercantile Exchange. In London, Brent crude for November was up by $3.00, or 2.9%, at $105.73 a barrel on the ICE.