Markets to get a cautious start of new week; interim budget eyed

The Indian markets showed a remarkable comeback in last session and the benchmarks recovering from the lows of the day surged to end near high points, there was good recovery in the blue chips that helped the markets bounce back. Today, though the global cues are good but all eyes will be on ‘Vote on Account’. Though, being an interim budget not much is expected but Finance Minister P Chidambaram may give a report card on the economy for the past five years and elaborate on tax collection. But the government is likely to announce some incentives too, to woo voters ahead of elections. Apart from the budget traders will be eyeing the movement in gold and jewellery stocks, as the Reserve Bank of India has said that nominated banks and agencies will not be allowed to import the precious metal in excess of their entitlements in first or second lot under the 80:20 scheme. Though, it said that in the case of gold imports pertaining to Advance Authorisation (AA)/Duty Free Import Authorisation (DFIA), the requirement of sequencing imports prior to exports shall not be insisted upon. There will be some buzz in the infra and banking stocks too, as the Corporate Affairs Ministry has removed a recent legal barrier that sought to thwart infrastructure lending by banks.

The US markets continued their gaining streak on Friday despite mixed set of economic data, amid indications that the data was distorted by the severe winter weather. The Asian markets have made an all green start after a report showed China’s new credit increased to a record in January, while the Japanese market too have recovered from early losses after the nation’s economic growth missed estimates and the yen strengthened.

Back home, Friday session proved to be a day of spectacular recovery for the Indian markets, which after remaining in a tight range for most part of the session, bounced back in the final hour and benchmark indices that have overlooked the gains in the global markets and good macro data of WPI inflation coming down to eight months low, suddenly moved higher by around a percent, with traders lapping up shares from all across the space ahead of the ‘Vote on Accounts’ scheduled to be presented in the parliament on Monday, and expectation of Finance Minister P Chidambaram projecting a lower fiscal deficit before elections. The global cues gave a positive lead to the Indian markets after the US bourses ended higher overnight, the Asian markets barring Japan, posted good gains for the session to snap the week on a high note, while the European markets too made a good start. Back home, the Indian markets after a positive start following a sharp plunge in last session seemed losing strength on profit booking in the very first hour of trade and slipped into red, the trade remained choppy and traders were seen avoiding any serious bet, but there was sudden spurt in the markets after the Whole Sale Price index inflation, India’s main inflation gauge eased to eight month low at 5.05% in January, as compared to 6.16% in December and 7.31% during the corresponding month of the previous year. Though, the enthusiasm did not last long as investors came to terms with higher Core CPI data, which moved up at 3% as compared to 2.8% in December. It was the closing day of official earnings season and some result disappointment too weighed on the sentiments, with PSU banking major SBI reporting below estimates number for the third quarter with 34.2% fall in net profit, while it’s Net NPAs too increased substantially to 3.24% for the quarter from 2.59% in the same quarter last year. However, there was dramatic turnaround in the markets in the final hour of trade, though there was sudden across the board buying at lower levels but banking along with tech stocks moved higher after SBI chief clarified that the PAT decline was mainly due to onetime pension provisions and MTM losses. There was spillover effect on all the retail stocks after good Q3 numbers by Future Retail which posted a turnaround with a net profit of Rs 21.74 crore for the quarter ended Dec 31, 2013. The oil and gas stocks, especially Reliance Industries remained in jubilant mood after Petroleum Minister Veerappa Moily categorically ruled out stalling the process of increasing the price of gas from April 1. Delhi chief minister Arvind Kejriwal had sought a stay on the hike in prices. Finally, the BSE Sensex gained 173.47 points or 0.86%, to settle at 20,366.82, while the CNX Nifty added 47.25 points or 0.79% to settle at 6,048.35.