Markets to extend the gains on good global cues

The Indian markets despite showing some volatility surged in the last hour of trade, to post gains of around half a percent on Monday. Traders took cues from some good earnings announcements and rate sensitives’ kept their spirit high, expecting a rate cut in RBI’s upcoming annual monetary policy review. Today, the start is likely to be in green tailing the good global cues; rate cut hopes are likely to support markets. Meanwhile, industry body CII has said that reforms in governance as well as innovation across businesses is needed to bring the slowdown-hit economy back to higher growth rate trajectory. The ailing aviation sector is likely to be in a jubilant mood, as the civil aviation ministry has allowed domestic airlines to unbundle services such as carrying check-in baggage, serving meals and allotting preferential seats, and charge separately for them. On the other hand there will be some somberness in the textile sector, as the Indian textiles exports stood at 28.4 billion during the April-February period, way below the target of $39.6 billion for 2012-13 fiscal that ended on March 31.

There will be lots of earnings announcements too, to keep the markets buzzing. Ajanta Pharma, Dabur India, EID Parry, Godrej Consumer Products, Petronet LNG, Marico and TVS Motor are among the many to announce their numbers today.

The US markets made a firm start of the new week and all the major indices despite giving up some of their gains in the latter part of the day, inched higher by about a percent on Monday mainly on report of a bigger than expected rebound in pending home sales in the month of March. Most of the Asian markets have made a positive start amid speculation that central banks will keep stimulating growth.

Back home, Indian equity indices made a jubilant start to the holiday shortened week with both the frontline indices recapturing their crucial 5,900 (Nifty) and 19,350 (Sensex) levels ahead of the Reserve Bank of India’s (RBI) monetary policy review later this week. The frontline gauges started the session on a positive note supported by firm regional peers but pared almost all of their gains in noon deals as uncertainty on the political front kept traders in check. Sentiments turned positive and both the gauges started gaining strength in late noon trade after the International Monetary Fund (IMF), indicating India’s declining growth has bottomed out, said the country’s GDP is likely to improve to 5.7% in 2013 and further to 6.2% a year after. Adding to the optimism, there was a breakthrough in the Govt - Opposition deadlock in Parliament and the Finance Bill is likely to be passed tomorrow. The domestic markets, in the last leg of the trade, picked up speed supported by firm opening in European markets as sentiments remained jubilant on expectation that central banks will continue their loose monetary policy stance. Back home, buying interest was visible in FMCG sector after FMCG major, HUL unveiled its annual results. The company has reported a rise of 41.06% in net profit for FY13 at Rs 3796.67 crore as compared to Rs 2691.40 crore in FY12. Company’s total income has increased by 17.96% at Rs 26417.11 crore for the year under review as compared to Rs 22394.68 crore for the previous year. Buying in software and technology stocks too supported the up-move with both the sectoral indices on the BSE is rising by over a percentage point after rupee depreciated 15 paise to close at 54.37 on April 26, 2013 on month-end dollar demand from importers and heavy capital outflows. Realty and infra stocks too remained on the buyers’ radar as the government is considering a relaxation in external commercial borrowing (ECB) norms for raising funds through the ECB window, particularly for low-cost housing and infrastructure sectors like telecom and ports. Finally, the BSE Sensex gained 100.78 points or 0.52% to settle at 19,387.50, while the CNX Nifty rose by 32.65 points or 0.56% to end at 5,904.10.