Markets to continue their jubilation with a positive start of the F&O expiry week

The Indian markets surged in last session and short covering took the markets above their crucial psychological levels. Today, the start of the holiday shortened F&O expiry week is likely to be in green and the bullish sentiments of the foreign institutional investors who brushing aside tapering fears have been buying continuously, may drive the markets higher. Traders will also be taking support from the report that indirect-tax collections grew by 5% in the April-November period of this fiscal, crossing Rs 3 lakh crore mark. Meanwhile, India will soon operationalise its first income-tax office in Cyprus to tackle funds flowing from the island nation even as it mulls rolling back suspension of tax benefits on investments made from that country. There will be buzz in the power sector, as the government is working on a proposal where separate entities would handle electricity supply and distribution. The banking stocks too may remain in action, as the finance ministry has directed state-run banks to recover at least 10% of loans that have gone bad, by the end of this financial year.

The US markets moved modestly higher in last session on getting good GDP data, at its fastest pace in two years. There were other supportive data too that boosted the morale of the traders. The Asian markets have mostly made a positive start taking cues from the US markets and, as the International Monetary Fund said that it’s raising its outlook for the world’s largest economy.

Back home, boisterous benchmarks showcased an enthusiastic performance on Friday, by rallying close to two percentage points and breaking lots of psychological levels in their northbound journey. Sentiments remained up-beat since beginning as key bourses opened with a decent gap on upside and there appeared not even an iota of profit booking in the session, as the benchmarks managed to fervently rally from strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices managed to end the session near their intraday high, surpassing their crucial 6,250 (Nifty) and 21,000 (Sensex) levels as investors took to hefty across the board buying. Sentiments remained bolstered after finance minister P Chidambaram said that India is better prepared than in May to deal with any consequences of the US Federal Reserve’s move to wind down its economic stimulus. He also said that Government is of the view that the markets had already factored in the US Federal Reserve’s decisions and, therefore, is not likely to be surprised by these moderate changes. Firm opening in European counterparts too supported the domestic markets. Though, Asian markets ended the session mixed with Japanese market ending modestly in green, while the Chinese markets losing considerable ground. Back home, rally in index heavyweight Reliance Industries (RIL) was the major factor of markets up-move. The stock zoomed over four and a half percent after Cabinet Committee on Economic Affairs (CCEA) gave approval to sell D6 gas at higher price. The new rate will come into effect from April 1, 2014. Software stocks like, Infosys, Wipro, HCL Technologies and TCS all edged higher after top US software consultancy firm Accenture announced positive results that exceeded street expectations. Besides, fertilizer stocks RCF, Coromandel International, National Fertiliser and Zuari Agro, too gained momentum on CCEA’s decision of revising the prices of natural gas, which is an input to manufacturing fertiliser and electricity generation, every quarter based on the average of the past four quarters, but with a gap of one quarter. Finally, the BSE Sensex surged by 371.10 points or 1.79%, to settle at 21079.72, while the CNX Nifty gained 107.60 points or 1.74% to settle at 6,274.25.