Markets likely to get a positive start; Q4 GDP data eyed

The Indian markets closed the May series on a positive note with benchmarks gaining over three percent for the series. Today, the start of the new series is likely to be cautious but in green and traders will be eyeing the Q4 GDP numbers slated to be announced later in the day. The economy grew 4.5 percent in the December quarter, but there is expectation that the economy will likely perform a little better and expand by 4.8 percent in the quarter ended March, though a weaker than expected numbers can act negatively for the markets. Nevertheless the economic data will set the tone for further interest rate action by the Reserve Bank of India during its upcoming monetary policy review. Meanwhile, the CAD concern is likely to keep looming as just in April-June, quarter of 2013, India's gold imports are expected to be almost half the imports of whole of 2012. There is likely to be buzz in the banking sector as the Reserve Bank of India has said that from April 2015 banks will no longer have the leeway to relax repayment norms for troubled companies without classifying their loans as non-performing assets. There will be some buzz in the aviation sector too, as the government is planning to soon issue a directive to Indian carriers to limit the seats for which they can charge extra to about 15-20 percent of the total seats.

Also there will be some result reaction to keep the markets ticking. Deccan Chronicles, Hind Rectifiers and Tatia Global are among the many to announce their numbers today.

The US markets bounced back and ended modestly higher on Thursday on the back of some weaker than expected economic data that eased concerns about Federal Reserve’s tapering down of the stimulus program. US economic activity in the first three months of 2013 grew by less than estimated, while pending home sales in the month of April increased less than expected. Most of the Asian markets have made a positive start tailing the surge in the Japanese market that after last session’s sharp correction has moved higher after nation’s industrial output expanded faster than estimated last month.

Back home, the May series Futures and Options contract settlement turned out to be an encouraging event for the Indian markets as bulls showed strong buying interests in majority of the blue chip stocks. The resilient markets vivaciously rallied over 808 (Sensex) and 207 (Nifty) points during the period. Though, the domestic bourses traded listless for most part of the trade as investors remained on sidelines ahead of the government’s announcement of the FY13 GDP numbers on May 31. Some concern related to economy also dampened the sentiments as the Organization for Economic Cooperation and Development (OECD) said that the combined gross domestic product of the OECD’s 34 members will grow by 1.2% this year, rather than the 1.4% rate forecast in November. For India it slashed its growth forecast to 5.3% in 2013 as against its earlier forecast of 5.9%. However, hefty short covering in the dying hours ahead of the series expiry supported the benchmarks to settle above their psychological 20,200 (Sensex) and 6,100 (Nifty) bastions. Some support to the domestic markets also came in from recovery in European counters as CAC, DAX and FTSE got their green trajectory back after a negative start. Back home, some strength to the markets came from buying in power sector stocks as a group of ministers (GoM) has approved setting up of coal regulator that could potentially benefit the power companies that have been strained by the scarcity and poor quality of coal supplied to them. Rally in FMCG stocks too supported the sentiments on report that monsoon rains could hit Kerala by as early as this Sunday, i.e., June 02. The India Meteorological Department (IMD) had earlier predicted the date of June 03 for the monsoon onset with a model error of plus or minus four days. Additionally, public sector oil marketing companies viz. BPCL, HPCL and IOC edged higher on the buzz of price hike due to sharp depreciation in rupee.  Stellar Q4 numbers from M&M, IOC and Tata motors too aided the sentiments. Mahindra & Mahindra posted a 1.7% rise in net profit for the three months ended March, helped by higher sales. IOC’s Net profit in the March quarter rose 14.54% to Rs 14,512.81 crore from Rs 12,670.43 crore in the same period last year, while Tata motors’ consolidated net profit in the January-March quarter declined 37 percent year-on-year to Rs 3,945 crore, but beat street expectation of Rs 2,990 crore net profit. Finally, the BSE Sensex gained 67.76 points or 0.34% to settle at 20,215.40, while the CNX Nifty rose by 19.75 points or 0.32% to end at 6,124.05.