Markets to extend the festivity mood into new week with a gap-up start

The Indian markets remained closed in last session for a public holiday and missed the euphoria of the global markets. Today, the start of the data heavy week is likely to be a gap-up one, supported by the cheerful mood of the other equity markets as US President Barack Obama has said that he will put plans for a US military strike against Syria on hold if it agrees to place its chemical weapons stockpile under international control. Traders will also be getting some strength with the expected strength in rupee which has been gaining ground in foreign markets overnight. There will be buzz in the telecom sector, as the Telecom Regulatory Authority of India (TRAI) has proposed a hefty cut of up to 60 percent in minimum auction prices for mobile phone spectrum in a response to lukewarm interest. The regulator has recommended a 37 percent cut in the all-India reserve price of the 1800 megahertz frequency band that are used for basic mobile services. The aviation stocks too are likely to be in cheerful mood, as the aviation ministry has called for state governments across the country to discuss on a possible mechanism to reduce the tax on aviation turbine fuel (ATF) whose price was hiked by a steep 6.9% last week. Though, there will be some concern too, Paris-based think-tank Organisation for Economic Cooperation and Development (OECD) has said that India's growth prospects in the near term are still weak and is facing financial turmoil triggered by possible tapering of quantitative easing policy in the US.

The US markets surged in last session, extending their previous week’s gain on upbeat Chinese data as well as the latest developments regarding the situation in Syria. The Asian markets have made another strong start with decline in crude prices and Japanese market was up by over a percent after rallying for more than two percent in last session.

Back home, boisterous benchmarks once again showcased an enthusiastic performance on Friday, by rallying over one and a half percentage points and breaking a lot of psychological levels in their northbound journey. Barring initial volatility, there appeared not even an iota of profit booking in the session; as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Frontline indices managed to extend their rally for third straight day and settled over their crucial 5,650 (Nifty) and 19,250 (Sensex) levels as investors took to hefty across the board buying. Sentiments remained up-beat on the back of recent measures announced by the Reserve Bank of India (RBI) governor Raghuram Rajan. Sentiments also got some boost from gross direct tax collection, which grew by over 14 per cent in the first five months (April-August) of this fiscal to Rs 1.88 lakh crore against Rs 1.64 lakh crore in the same period last year. Meanwhile, industry body CII has expressed the hope that the central bank would shift towards an expansionary monetary policy by cutting interest rates to stimulate growth. Global cues too remained supportive with the US markets ending modestly higher ahead of the monthly jobs report, though European markets witnessed mixed trade in early deals. Back home, appreciation in Indian rupee aided the sentiments. The partially convertible rupee traded near 65 per dollar mark at the time of equity market closing. Buying in telecom too aided the sentiments. Stocks like Bharti Airtel, Reliance Communication and Idea Cellular surged on reports that the Telecom Regulatory Authority of India will meet on September 6 2013, to consider spectrum pricing. Additionally, aviation stocks viz. Spicejet and Jet Air India edged higher as airlines in India recently announced a steep hike in airfares to mitigate the impact of the sharp fall in the rupee and surge in jet fuel prices. Finally, the BSE Sensex surged 290.30 points or 1.53% to settle at 19,270.06, while the CNX Nifty climbed by 87.45 points or 1.56% to end at 5,680.40. Indian stock, debt and currency markets remained closed on Monday due to Ganesh Chaturthi.