Markets to start the new series in green on good global cues

The Indian markets ended the February series on a positive note and both the benchmarks added over half a percent for the day. Today, the start of the new series is likely to be in green and the markets may extend their momentum on the last trading day of the week, on the back of positive global cues soothed by Fed chief’s dovish tone. Rate sensitives will keep buzzing as the Reserve Bank of India (RBI) governor Raghuram Rajan has hinted that rates are likely to remain unchanged in the forthcoming monetary policy in April 2014. Today, there will be some buzz in the PSU stocks, as an Empowered Group of Ministers is scheduled to meet today to decide the price at which shares of IOC will be sold to ONGC and Oil India. The Government aims to sell 10 per cent of its equity in IOC through a block deal. Today, the fertilizers sector too will be in action, as the Cabinet Committee on Economic Affairs (CCEA) is likely to consider a proposal to raise the fixed cost of urea by upto Rs 350 per tonne, a move that would lead to increase in subsidy by about Rs 900 crore.

The US markets ended higher taking S&P 500 to record closing high, reacting to the Federal Reserve Chair Janet Yellen’s testimony before the Senate Banking Committee where she acknowledged the economic impact of the severe winter weather. However, the economic news remained weak with drop in durable goods orders in the month of January. The Asian markets have made a mixed start with some of the indices trading marginally in red; the Japanese market was weighed down by the gain in yen.

Back home, Indian markets remained closed on Thursday on account of a local holiday., while Wednesday turned out to be a remarkable day of trade for Indian equity markets with both the frontline indices snapping the Futures & Options series of February month near their psychological 21,000 (Sensex) and 6,250 (Nifty) levels. Boisterous benchmarks once again showcased an enthusiastic performance, extending their northward journey for fourth straight session with investors getting support from report that overseas investors have been net buyers over the last ten sessions. Foreign institutional investors (FIIs) bought shares worth a net Rs 423.41 crore on February 25, 2014, as per provisional data from the stock exchanges. After a steady opening, there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. However, global cues remained sluggish with European markets trading lower in early deals, The Asian markets ended mixed on concern that the world’s second-largest economy China is slowing as financial stresses increase. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Stocks related to NBFC counter remained on buyers radar as the Reserve Bank of India moved closer to granting new banking licences as a panel headed by former RBI governor Bimal Jalan finalized a list of firms for the central bank to consider. Buying in software and technology counters too aided the sentiments on optimism over US business outlook. However, Metal counter continued witnessing selling, tailing the weakness in the Chinese market where the currency tumbled the most in more than a year on speculation the central bank wants an end to the currency’s steady appreciation. Meanwhile, fertilizer stocks ended mixed ahead of CCEA meet on Friday. The Cabinet Committee on Economic Affairs (CCEA) in its meeting is expected to consider increasing the fixed cost for urea plants and amend the new investment policy (NIP 2012) soon. The proposal to increase fixed cost although would not entail any increase in the retail prices of urea. However, this would increase government’s subsidy burden by around Rs 900 crore. Finally, the BSE Sensex surged by 134.52 points or 0.65%, to settle at 20986.99, while the CNX Nifty gained 38.75 points or 0.62% to settle at 6,238.80.