The Indian markets surged to their record high in the last session as the traders looked for an opportunity of pre-election rally amid good global cues and economic reports. Today, the start is likely to be a bit soft-to-cautious on weak global cues, on the domestic front traders will be cautious as the Finance Minister P Chidambaram has said that Parliament could set an inflation target for the Reserve Bank to achieve. Though, he emphasised that the economy is presently more stable as the fiscal and current account deficits are under control and the economy is more stable than it was 18 months ago. There will be buzz in the banking license aspirants as the RBI Governor Raghuram Rajan has said that the central bank would take a decision in the next few weeks, subject to approval of the Election Commission. Telecom stocks too may see some action, as the Planning Commission deputy chairman Montek Singh Ahluwalia has said that operationalisation of the model code of conduct would delay spectrum sharing and trading by three to four months though the government had in principle approved the concept. Export oriented stocks too will in focus as the Federation of Indian Export Organisations (FIEO) has said that government should expeditiously clear Rs. 19,000 crore of duty refund claims as the mounting arrears are hurting shipments.
The US markets made a flat closing on Friday and trade remained in consolidation mood despite good jobs data, traders were a bit cautious with the rising unemployment rate. The Asian markets have made mostly a soft start and some of the indices are trading lower by around a percent in early deals after China reported an unexpected plunge in exports, raising concern the slowdown in economic growth is accelerating.
Back home, after scaling all-time closing highs in previous session, Indian equity benchmarks extended their rally on Friday with bull taking full control over the session. Sentiments remained upbeat since beginning as key bourses opened with a huge gap on upside and there appeared not even an iota of profit booking in the session with benchmarks fervently gaining from strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only extended their rally for fourth straight day but also recorded their fresh all time closing high which they never witnessed before, settling comfortably above their crucial 6,500 (Nifty) and 21,900 (Sensex) bastions as investors remained hopeful that the pre-election rally fuelled by foreign funds along with an increased participation from retail investors will drive markets higher in the near-term. Meanwhile, improving macro economic data and a private survey showing BJP-led government coming to power too lifted the stock markets to fresh all-time highs. Some support also came with an HSBC survey saying that India’s manufacturing and services sectors expanded at a faster rate than China in February even as emerging market economies grew at the slowest pace since September 2013. On the global front, European shares made a dismal opening, while Asian markets too ended mostly lower ahead of the US monthly labor report. Back home, markets continued their northward journey on report that foreign institutional investors remained net buyers in equities for the past 15 straight trading sessions. Meanwhile, the improving macro-economic data boosted sentiment for banks which are a proxy to the economy. ICICI Bank, HDFC Bank, SBI and Axis Bank all edged higher in the trade. Finally, the BSE Sensex surged by 405.92 points or 1.89%, to settle at 21919.79, while the CNX Nifty gained 125.50 points or 1.96% to settle at 6,526.65.
