The Indian markets despite some choppiness kept their gaining momentum intact in the last session. Today, the start is likely to be in green and traders will be rejoicing the report of India’s current account deficit (CAD) coming sharply lower at a four-year low to $4.2 billion or 0.9% of GDP in December quarter of 2013-14. The Reserve Bank of India while, releasing the report said that the lower CAD was primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports. Meanwhile, after the announcement of the Lok Sabha election schedule, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that the new government will need to revive investments and push infrastructure projects within the three months of being elected to bring economic growth back on track. The PSU banking stocks are likely to remain under pressure, as the finance minister P Chidambaram has said that Public sector banks are likely to log higher bad loans by the end of this month compared with the same period last year. He also blamed large corporates for this, saying bad loans are high on large corporate accounts.
The US markets made a flat closing in last session with trader taking a breather after a big rally and uncertainty about the near-term outlook for the markets ahead of Friday’s monthly jobs report helped keep traders on the sidelines. There were some weak economic reports too, that restricted wider participation. The Asian markets have mostly made a green start led by the Japanese market after a Pension Fund report.
Back home, Indian equity benchmarks, extending their last session’s rally, ended in green with gain of around half a percent on Wednesday supported by firm global cues. Earlier markets made a positive start, though turned into red terrain in mid way of trade, as market participants reacted negatively to the long Lok Sabha election schedule announced by the Election Commission, starting from April 7, to May 12, 2014, while the counting of votes will take place on May 16. Sentiments also remained dampened after growth in services sector contracted for the eighth straight month in February. The HSBC Purchasing Managers’ Index (PMI) index rose to 48.8 in February from 48.3 in the previous month, but remained below the 50 mark that separates growth from contraction. However, things got stabilized in second half of trade with Indian rupee appreciating against dollar. Some support also came after Finance Minister P Chidambaram said that the model code of conduct will not affect the bank licence process. Global cues too remained supportive and Asian markets too ended mostly in the green, however European counters were trading in the red terrain in early deals. Back home, the up-move in domestic markets was also supported by rally in stocks related to infra space, as the government has cleared a long pending bailout policy for financially-stressed highway developers which would allow them to defer the premium that they have committed to pay the government. Banking stocks too remained on buyers’ radar, as the Finance Minister P Chidambaram was having a meeting with chief executives of public sector banks for a quarterly performance review. In the meeting, besides capital adequacy, Chidambaram is expected to discuss the NPA situation and recovery measures taken by banks, status of stalled projects as well as credit flow to new projects. Meanwhile, buying in software and technology counters too aided sentiments. Stocks like Infosys, TCS, Wipro, HCL Tech etc. surged after the Obama administration predicted that US gross domestic product will expand 3.1% in 2014 after rising 1.9% last year. Finally, the BSE Sensex surged by 67.13 points or 0.32%, to settle at 21276.86, while the CNX Nifty gained 30.70 points or 0.49% to settle at 6,328.65.
