Markets to get a good start fuelled by RIL numbers and global cues

The Indian markets despite a choppy trade amid slew of weak macro economic data, managed to end higher for the fifth straight day in last session. Today, the start is likely to be in good taking cues from the gain in global equity markets, while on domestic front traders will be rejoicing the better than expected numbers from Reliance Industries, which came after the trading hours last day. RIL reported a 14% growth in revenues to Rs 106,523 crore in the July-September quarter and posted a marginal 1.5% increase in net profit to Rs 5,490 crore. Most importantly, it became the first private sector firm to report revenues exceeding Rs 1 lakh crore in a quarter. Though, there will be some concern related to macro numbers, as retail inflation gauged by CPI, reversed its declining trend to hit a near-double-digit mark to 9.84% on-year in September. The rate sensitives will be under pressure with a repo rate hike in the Reserve Bank of India’s October 29 policy meet seems most probable. However, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that inflation will soften in coming months, as the steps taken by government to destock the excess food stocks would result in cooling off of prices in few weeks ahead. There will be some cheer in the realty sector on reports that the government would soon decide on relaxing FDI guidelines for the housing sector. Apart from that there will be lots of important result announcements to keep the markets buzzing.Bajaj Finserv, Bajaj Finance, DCB, HDFC Bank, NIIT Tech, Sintex Inds and TCS are majors to announce their numbers today.

The US markets bounced back to make a firm closing on Monday on renewed optimism about lawmakers reaching an agreement to end the fiscal crisis. The major gain was generated by the report that President Barack Obama is scheduled to meet with the Congressional leadership from both parties at the White House. The Asian markets have once again made a mixed start, though most of the indices are in green on hopes that US legislators may broker a deal and the government will avoid breaching debt limit this week.

Back home, extending their northward journey to fifth consecutive day, Indian equity benchmarks snapped the session with gain of over quarter a percent and frontline gauges surpassing their crucial 20,600 (Sensex) and 6,100 (Nifty) levels, supported by buying in software and technology counters after upbeat results of bellwether Infosys last week. Some support also came in with Finance Minister P Chidambaram questioning IMF’s low growth projection of 3.8 percent for India for the current fiscal and saying that the government will not hesitate to take difficult decisions to contain fiscal and current account deficits. Meanwhile, foreign institutional investors (FIIs) bought shares worth a net Rs 1010.45 crore on Friday, October 11, 2013. However, profit booking was seen at higher levels as higher-than-expected headline inflation in September weighed on market sentiment. September Wholesale Price Index (WPI) grew at its fastest pace in seven months at 6.46% against 6.1% in August. July WPI inflation was revised to 5.85% versus 5.79%. Onions drove up inflation as prices rose by a massive 322% against 244% increase in August. Some cautiousness also crept in on the back of lower than expected IIP numbers of August, which was announced late Friday and came at a meager 0.6% versus a robust 2.8% in July. Meanwhile, Indian rupee weakened ahead of the Thursday’s deadline for the US debt ceiling. Global cues too remained pessimistic with most of the Asian markets ending in the red amid concerns about the political impasse in the US on the debt ceiling issue. Back home, sentiments once again turned up-beat with investors piling up positions in banking stocks after Reserve Bank of India’s (RBI) governor, Raghuram Rajan announced big reforms in the offing for the banking sector. He said that RBI will soon come out with major reforms in the banking sector that will allow foreign banks to enter India in a big way and even take over domestic lenders. Meanwhile, index heavyweight Reliance Industries too ended in green ahead of Q2 earnings, slated to be released later in the evening. Stocks related to auto sector too remained on the buyers’ radar on expectations of higher demand during the ongoing festive season. Finally, the BSE Sensex gained 78.95 points or 0.38%, to settle at 20607.54, while the CNX Nifty added 16.50 points or 0.27% to settle at 6,112.70.