Markets trend to remain jubilant on good global cues

The Indian markets extended their gaining streak in last session despite weak global cues. Today, the start is likely to remain jubilant and the bourses will strengthen further taking cues from the mostly positive global cues. Traders will be taking support from the latest survey of National Council of Applied Economic Research (NCAER), which said that after a slide in the second quarter of the current fiscal, higher exports, enhanced farm produce and moderation in inflation improved business confidence during the October-December period. The Business Confidence Index (BCI) rose by about 21.8 percent to 122.3 points from 100.4 in July-September quarter, 2013-14. Also, the Reserve Bank of India (RBI) Governor Raghuram Rajan has said that the central bank’s focus is to bring down inflation to boost investor confidence. There will be some buzz in realty sector on a private report that PE investments in the country’s real estate sector during 2013 registered a 13-per cent increase to Rs 7,000 crore ($1.2 billion), over the Rs 6,200 crore ($1.1 billion) done in 2012. There will be some buzz in the money markets too, as the RBI has said that from April 1 all entities regulated by it should report their secondary market over-the-counter trades in corporate bonds and securitised debt instruments within 15 minutes of the trade on any of the stock exchanges.

The US markets rallied in last session, though the stocks cooled off from the their days’ high but remained mostly positive, and the S&P 500 set a new record intraday high on hopes that Fed Chair Janet Yellen may not continue tapering in the face of the weak economic data. The Asian markets have made a mixed start, though most of them are in green, led by the Japanese Nikkei on weakening yen, while the Chinese market was marginally in red on report of drop in property sales last week.

Back home, Indian equity benchmarks, despite negative opening, snapped the session near their high point of day and extended their rally for second straight day. Domestic bourses garnered gains of over half a percent, recapturing their crucial 20,800 (Sensex) and 6,180 (Nifty) bastions. Earlier markets made a negative opening as some cautiousness crept in, after the global rating agency Moody’s indicated that forthcoming elections will delay the reform process and hurt growth, it also said that it expects growth to pick up to only 5.5 per cent in FY15. The agency also gave a negative outlook for non-financial corporates in 2014 on weak economy, political uncertainty and effects of the tapering by US Fed. Sentiments also got some boost with Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan’s statement that India's Current Account Deficit (CAD) is expected to be around two percent of GDP during the current fiscal on the back of slackening imports and increased shipments. Meanwhile, RBI Governor Raghuram Rajan has said that the central banks of developed nations must also keep in mind emerging nations while framing monetary policies, though he asserted that India is well placed to weather financial crisis. On the global front, Asian markets ended lower led by Hong Kong and Chinese indices, while the European markets too made a mixed start. Back home, sentiments remained up-beat supported by appreciation in Indian rupee which extended their gains and was trading higher at Rs 61.98 at the time of equity market closing as against the US dollar compared to its previous close of Rs 62.12. On the sectoral front, Capital Goods sector remained the top gainer led by L&T which ended higher by nearly 3%, after the company received Foreign Investment Promotion Board (FIPB) approval for foreign direct investment (FDI) in L&T Infrastructure Development Projects (L&T IDPL). Meanwhile, power sector remained in limelight, with power distribution company Tata Power witnessed surge of over 5%, while the producer NTPC declined by over 11% after the Central Electricity Regulatory Commission (CERC), the electricity regulator allowed Tata Power to raise tariffs and receive compensation to make up for losses incurred at its flagship Mundra plant in Gujarat. Finally, the BSE Sensex surged by 110.69 points or 0.53%, to settle at 20811.44, while the CNX Nifty added 30.65 points or 0.50% to settle at 6,186.10.