Markets likely to get a flat-to-positive start

The Indian markets despite losing momentum in the second half managed to end modestly higher in last session. Today, the start is likely to a bit cautious though the markets may continue their momentum with a positive start. Traders will be eyeing the development in US ahead of the RBI’s policy review on April1. Today, infra stocks will keep buzzing, as the Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that efforts to revive infrastructure investment would help in reverting to 8 percent growth in next three years. IT stocks too will be in focus as India will push for an agreement on information technology and software with China during the third round of strategic and economic dialogue in Beijing. The PSU oil marketing companies are likely to rejoice with a report that the loss on sales of diesel has been trimmed by more than Re 1 to Rs 7.16 per litre on the back of softening international oil rates. On the other hand there will be some disappointment in corporate houses aspiring to set up banks, as it has been reported that Reserve Bank of India which is in the final stages of licensing process may not oblige them.

The US markets snapped the last session with good gains, as housing data bolstered confidence in the economy and in a positive reaction to comments from Russian President Vladimir Putin who said that he does not plan to seize any other regions of Ukraine following the annexation of Crimea. The Asian markets have mostly made a soft start awaiting the Federal Reserve’s policy statement.

Back home, Indian equity benchmarks ended Tuesday’s session on flat note due to profit booking seen at higher levels in late trades, after the domestic bourses hit fresh all-time highs in intra-day trade. Sentiments remained up-beat since beginning with key bourses opening with a huge gap on the up-side  and frontline gauges scaling past their crucial 22,000 (Sensex) and 6,550 (Nifty) bastions, as sentiments remained jubilant after the investment banker Goldman Sachs upgraded Indian equities to “overweight” from “market-weight” and raised its target on Nifty to 7,600, citing reduced external vulnerabilities, including a narrowing current account deficit, and potential for gains ahead of elections that conclude in May. Supportive cues from US and Asian markets too provided some support to local bourses and sentiments remained up-beat as investors breathed easy with ebbing Ukraine concerns over the situation in Crimea even as the region voted in favor of quitting Ukraine. However, disappointing cues from European market took their toll on domestic sentiments in late trade and dragged the frontline gauges below the psychological 6,550 (Nifty) and 21,850 (Sensex) levels. Indian rupee too pared most of its initial gains and was trading at 61.07/08 versus its previous close of 61.19/20, but off its session high of 60.88, on demand for the dollar from oil refiners. Meanwhile, shares of software and technologies like Infosys and TCS ended lower on the back of an appreciating rupee as they earn most of their revenues from exports to the US. Additionally realty stocks viz. Godrej Properties, Prestige Estates Projects, DLF and Unitech all reversed intraday gains in choppy trade. Buying in pharma stocks too supported the sentiments on report that the foreign direct investments in the sector has more than doubled to $1.26 billion during the April-December period of 2013-14 fiscal amid concerns over increasing acquisitions of domestic firms by multinationals. Finally, the BSE Sensex added 22.81 points or 0.10%, to settle at 21832.61, while the CNX Nifty was up by 12.45 points or 0.19% to settle at 6,516.65.