Markets likely to extend the gains into new week

The Indian markets sensed some relief on the final day of the last trading week, traders mood got boosted with the gain in rupee. Today, the start of the eventful week, both from the political and economic front is likely to be in green. Traders will be eyeing the movement of rupee, as late Thursday Reserve Bank of India said it would sell Rs 22,000 crore worth of cash management bills (CMBs) every Monday. Also, the government is likely to announce a slew of measures, including relaxing norms for overseas fund raising by corporate. Marketment will keenly wait for the IIP data to be announced later in the day, Industrial output, as measured by the Index of Industrial Production, is seen contracting 1.1% in June. On political front traders will monitor the ongoing Monsoon session of Parliament. Government will introduce in Parliament the Bill to amend the Securities and Exchange Board of India (SEBI) Act that would give more powers to the capital market regulator SEBI. There will be some action in the oil & gas sector too, on the buzz that the oil ministry has proposed that only state-run ONGC and Oil India should be allowed to explore shale in blocks that were given to them without an auction, earlier successful explorers were allowed to explore shale oil and gas in their existing blocks without bidding.

There will be lots of important result announcements too, AIA Engineering, Bajaj Hindusthan, Britannia Inds, DLF, HPCL, India Cements, Indian Hotels, Indraprastha Gas, Jindal Stainless,, JP Power, ONGC, SBI and Tech Mahindra are among many to announce their numbers today.

The US markets ended lower in the last session as the traders remained on sidelines ahead of a data heavy week and there was concern about the Fed’s stimulus tapering. The Asian markets have made a mixed start, while the Chinese market is trading with good gain the Japanese market is in somber mood after the GDP data missed the forecast and the yen strengthened against the dollar.

Back home, the relief rally finally came through on last trading session of holiday truncated week, after plunging close to nine percent in two weeks, the market participants hunted for oversold but fundamentally strong bargains amid encouraging tidings from both domestic as well as global front. Initially, the local bourses traded cautiously on report that foreign institutional investors (FIIs) sold shares worth a net Rs 350.93 crore on August 7, 2013, but soon markets reclaimed their gaining momentum and fervently gained strength to strength, taking support from Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that the economy is likely to grow at 5.5 percent this financial year. Also, net direct tax collections went up by 10.37 per cent to Rs 1.17 lakh crore during the April-July period of the current fiscal year as against Rs 1.06 lakh crore mopped up during the same four months of 2012-13. Firm opening in European counters too provided strength to Indian markets. Supportive cues from Asian counters too provided the much needed support to the local markets after Bank of Japan maintained its stimulus policy. Back home, markets continued to trade higher tracking strength in Indian rupee which appreciated against the US dollar. Some support also came in from Consumer Affairs Minister K V Thomas’ comments that India will be world leader in retailing by 2020 as it seems domestic retail market growing to a size of $1.3 trillion by then, providing a tremendous growth opportunity for retail and FMCG players alike. However, the gains remained capped due to selling witnessed in oil and gas counter after Parliamentary panel recommended review of the Government’s decision to raise gas prices and said that Reliance Industries should deliver its shortfall in production of the fuel at the old rate. Finally, the BSE Sensex gained 124.46 points or 0.67% to settle at 18,789.34, while the CNX Nifty rose by 46.55 points or 0.84% to end at 5,565.65.