Markets to extend the gaining momentum on supportive global cues

The Indian markets remained in jubilant mood in the last session, mainly supported by fund buying. Today, the start is likely to be in green, though some consolidation too can be expected and the traders apart from the market development will be eyeing the Karnataka assembly election results. Meanwhile, the National Council of Applied Economic Research (NCAER) has said that the Indian economy is likely to grow by 6.2 percent in the current financial year, significantly higher than the Reserve Bank of India's GDP growth projection of 5.7 percent for 2013-14. Traders are also likely to get some support with the government’s statement that it has taken a slew of initiatives to boost exports and reduce imports to lower trade deficit and thereby Current Account Deficit (CAD). Sugar stocks are likely to be in the limelight as the Food Ministry has notified the Cabinet Committee on Economic Affairs (CCEA) decision to partially decontrol the sugar sector. On April 4, the CCEA had decided to decontrol the sugar sector.

Also, there will be some important result announcements too, to keep the markets buzzing. ABB, Corporation Bank, HDFC, Lupin, SKS Microfinance, Triveni Engineering are among the many to announce their numbers today.

The US markets extended their gains on Tuesday, though the trade remained subdued lacking any major economic news. The major indices just extended their upward trend of the past few weeks. The Asian markets have made a jubilant start, as the Chinese imports and exports topped estimates. Japanese Nikkei too has surged due to weakness in the yen.

Back home, Extending their previous sessions’ rally, Indian equity indices ended the remarkable day of trade near intraday with frontline gauges surpassing their crucial 6,000 (Nifty) and 19,850 (Sensex) levels, hitting its highest level in more than 13 weeks supported by higher capital inflows by foreign funds into the equity market. The foreign institutional investors were net buyers of Rs 897 crore of stocks on May 6, 2013, taking the 2013 net buying to a total of $12.17 billion. The Indian benchmarks started the day’s trade on a positive note as sentiment remained upbeat on hopes of encouraging Index of Industrial Production (IIP) data for March to be released later this week. The rally got extended after European counterparts opened higher on the back of strong earnings from major banks. Asian markets too exhibited encouraging trade with Japanese market hitting its highest closing level since June 2008. Back home, the markets up-move was also supported by government’s plan of raising Rs 20,000-crore by divesting 10% equity in Coal India, which would alone meet half of this year’s disinvestment target and is expected to be completed by September 2013. Sentiments also remained jubilant on government’s plan to unveil a new category for overseas investors called foreign portfolio investors (FPI) that do not come under the foreign direct investment (FDI) route. The FPI category is expected to include all classes of foreign investors such as NRIs, FIIs and qualified institutional investors whose investments are distinct from FDI inflows. Some support also came in from buying in infra stocks after Planning Commission Deputy Chairman Montek Singh Ahluwalia urged multilateral development banks like the Asian Development Bank (ADB) and others to come up with innovative ways that will enable domestic debt to be raised and invested in infrastructure development in the country. However, export related stocks failed to gain traction after technical committee set up by the Reserve Bank of India recommended a cap on interest margins charged by banks lending to exporters. Finally, the BSE Sensex gained 215.31 points or 1.09% to settle at 19,888.95 while the CNX Nifty rose by 72.50 points or 1.21% to end at 6,043.55.