Markets to extend the gains to new week on positive global cues

The Indian markets led the rally in global equity markets in last session with both the benchmark indices surging by over two percent for the day, on the back of some better than expected earnings announcement. Today, the start is likely to be positive with markets extending the gains to new week. Traders will be reacting to some earnings announcement made during the weekend, while there will be some support with Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that Current Account Deficit is likely to be lower than the projection of 3.8 percent of the GDP and India will be in a better position to neutralise the impact of the tapering of monetary stimulus by the US Fed. Traders will also be getting respite with the Reserve Bank of India (RBI) saying that it has no immediate plan to close the dollar-swap window for oil companies and it will be done in a calibrated manner. The rupee movement too will be eyed, responding positively to the RBI’s statement. The aviation stocks will be in action, on report that after witnessing constant fall in the past three years, the industry witnessed 13.4% rise in domestic flyers in September 2013 to 45.5 lakh from last September’s figure of 40.2 lakh.

There will be some important result announcements too, to keep the markets buzzing. Asian Paints, Geometric, HDFC, JK Lakshmi Cements, Karnataka Bank, Merck, Rallis India, Whirlpool and Zee Entertainment are among the many to announce their numbers today.   

The US markets remained in jubilant mood in last session, extending their gains on some good earnings announcement and on hopes that Fed will not go for tapering anytime soon. The Asian markets have made a green start with some of the indices trading up by over half a percent in early deals. Japanese market was up by around a percent on report that the country’s exports rose 11.5 percent in September from a year earlier.

Back home, boisterous benchmarks, resuming their northward journey after a day of break, staged an enthusiastic performance on Friday, by rallying over two percentage points and breaking lots of psychological levels in their northward rally. Sentiments remained up-beat since beginning as key bourses opened with a huge gap and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength with investors continued hunt for fundamentally strong stocks. Frontline indices managed to settle near their crucial 6,200 (Nifty) and 20,900 (Sensex) bastions as investors took to hefty across the board buying. Sentiments got bolstered after study commissioned by market regulator Securities and Exchange Board of India (SEBI) suggested lowering of securities transaction tax (STT) to boost the capital market. Supportive cues from US markets also supported the local markets initially, as sentiments got boosted report of decline in initial jobless claims and rise in regional manufacturing activity. Meanwhile, Asian markets too ended mostly in the green with Chinese Shanghai ending higher after the nation’s economy grew 7.8% in the third quarter. Back home, the market sentiment was boosted by data showing foreign institutional investors (FIIs) bought shares worth a net Rs 821.50 crore from the equity markets on October 17, 2013. Frontline gauges extended their rally in late trade as investors continued to pile-up positions in metal stocks. Scrip like Steel Authority of India, Tata Steel, Jindal Steel and Power, Sesa Sterlite, Hindustan Zinc, Hindalco and JSW Steel edged higher after China’s economy grew at its fastest pace this year for the quarter ended September. Stocks related to banking counter too remained on buyers’ radar with scrip like ICICI Bank, State Bank of India, Federal Bank, Indusind Bank, Bank of Baroda, Canara Bank, Kotak Mahindra Bank all edging higher on expectation that Reserve Bank of India (RBI) would increase the cap of the amount that banks could borrow through repo window in its upcoming monetary policy review on October 29, 2013. Meanwhile, some support also came in from buying in public sector oil marketing companies after crude oil prices eased to three months low on demand concern. Finally, the BSE Sensex surged 467.38 points or 2.29%, to settle at 20882.89, while the CNX Nifty gained 143.50 points or 2.37% to settle at 6,189.35.