Markets likely to see good start on supportive global cues

The Indian markets ended the week on a dismal note on Friday and the benchmark indices lost almost what they have gathered in previous session, global concern weighed on the market sentiments. Today, the start is likely to be good as the Asian markets have surged and the euro too has strengthened against dollar that may auger well with the domestic currency and can soothe the sentiments. However, traders will be keenly eyeing the second quarter GDP numbers to be announced later this week on Wednesday, for domestic cues. A growth rate of less than 7% may have a negative impact on the market, while on the same time a better reading can help them. The aviation stocks that kept buzzing last session ahead of a meeting with the Prime Minister Manmohan Singh are likely to continue their upmove, though the PM has not given any firm assurance but has said to discuss the issues and concerns of airlines with the civil aviation and finance ministries. The airlines mainly demanded for rationalizing of sales tax on jet fuel and faster approvals for private airlines to be allowed to fly on those international routes where bilateral from the Indian side remain underutilized. The power sector too is likely to keep buzzing a day ahead of Prime Minister Manmohan Singh's meeting with top officials of key ministries on the developing crisis in the power sector.

The US markets in a short trading session on Friday closed marginally lower, the volume remained low as the traders were away for Thanksgiving holiday. The Asian markets have made a good start and most of the indices are trading with gains of over one percent on getting positive signals from the other global markets. America’s Thanksgiving retail sales jumped to a record and there was a report that the International Monetary Fund is preparing a 600 billion euro ($799 billion) loan for Italy in case the debt burden worsens.

Back home, Indian markets finished last trading session of the week on a daunting note as the frontline equity indices were back to square one after surrendering all the gains garnered in the previous session. The benchmarks failed to extend the winning momentum with the start of a new series of futures and options contract as undermining leads from the markets across the globe pummeled domestic investors’ conviction. Sentiments in domestic markets got spooked in the first half of trade following the sustained sell-off in European markets which extended their losing streak for the tenth straight session after borrowing costs for Italy’s sovereign bonds touched an euro-era record and as a meeting between the eurozone's three biggest economies highlighted their differences on finding a solution to the region's debt crisis. However, the markets showed signs of consolidation earlier in the session as some policy reform announcements by the government overnight prevented the key gauges from drifting to lower levels. The reports that cabinet allowed foreign retailers to own a 51% stake in the multi-brand retail sector, and also approved a 100% FDI in single-brand retail, encouraged not only domestic retailers but also global groups such as Walmart, Carrefour and Tesco. The downside for the bourses was also capped as investors continued to pile hefty positions in the Capital Goods counter while the high beta Realty pocket too rallied in the session on speculations that foreign direct investment in multi-brand retail would bring big-ticket projects for real estate players in India. Earlier on Dalal Street, the benchmark got off to a sedate opening as sentiments were largely influenced by pessimistic cues from Asian markets. The benchmarks showed some fervor and rebounded to touch the highest point in the session in mid morning trades. Thereafter the indices showed signs of consolidation and gyrated in a tight band for most part of the session. However, just when it looked like that the bourses would settle on a quite note, investors resorted to hefty position squaring and dragged the benchmarks to the lowest point in the session from where the indices failed to recuperate. On the BSE sectoral space, market participants booked hefty profits in the Information Technology counter which got hammered by two percent while the Metal and Oil & Gas counters also got butchered by over one and half a percent. Finally, the BSE Sensex plunged by 163.06 points or 1.03% to settle at 15,695.43, while the S&P CNX Nifty shaved off 46.40 points or 0.98% to close 4,710.05.