Thursday 10 April 2014

Markets to extend the gaining momentum with a positive start

The Indian markets went for a rally in last session; the election exuberance was clearly visible in marketmen mood and there was aggressive buying after the IMF increased its growth forecast for India in 2014. Today, the start is likely to be in green and the momentum is expected to remain firm, as after IMF, now World Bank has projected an economic growth rate of 5.7 percent in fiscal year 2015 for India on the back of a more competitive exchange rate and many large investments going forward. In other good news, on the back of better business environment India Inc raised $2.72 billion more through external commercial borrowings (ECB) in the first 11 months of financial year 2013-14. The steel stocks may see some action on the World Steel Association (WSA) statement that India’s steel demand may grow 3.3 per cent this year on higher demand from construction and manufacturing sectors. There will be some buzz in the aviation stocks too, as the Sebi is likely to pass final order on Jet Airways, Etihad Airways deal soon.
The US markets bounced back, ending higher in last session following the release of the minutes of the latest Federal Reserve meeting that eased concerns about the central bank raising interest rates sooner than anticipated. The Asian markets after a positive start has pared some gains after the report that Chinese exports unexpectedly fell.
Back home, boisterous benchmarks showcased an enthusiastic performance on Wednesday with bull taking full control of the session as investors continued hunt for fundamentally strong stocks. Earlier, markets after a gap-up opening traded in very tight-band for most part of the day but massive buying in last leg of trade mainly underpinned markets to clock record closing high. Sentiments remained up-beat as traders remained bullish about corporate India’s improvement in new orders and sales growth on a slew of project clearances undertaken by the government in recent months and the possibility of a stable government at the centre, post the Lok Sabha elections. Marketmen also remained optimistic on International Monetary Fund’s (IMF) latest edition of the World Economic Outlook, stating that India’s growth is expected to recover from 4.4 percent in 2013 to 5.4 percent in 2014 supported by slightly stronger global growth, improving export competitiveness and implementation of recently approved investment projects. Hopes of BJP-led government coming to power too aided the sentiments. Supportive cues from US markets too provided some support to local markets, while Asian markets too ended mostly in the green terrain. Firm opening in European counters too supported the sentiments. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Frontline indices ended the session near their day’s high levels with Sensex settling comfortably above their crucial 22,700 levels, while Nifty ended tad below the psychological 6,800 mark, as investors took to hefty across the board buying. The markets sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on April 7, 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 703.71 crore on Wednesday, as per provisional data from the stock exchanges. Meanwhile, rally in banking stocks like Bank of Baroda, South Indian Bank, Indian Bank and Oriental Bank of Commerce supported the sentiments as certain broking firms have upgraded the banking sector to Neutral from Negative earlier on signs of a slight economic turnaround. Moreover, sugar stocks continued to remain on buyers’ radar as speculators indulged in creating positions, supported by summer season demand from bulk consumers amid fall in production. Finally, the BSE Sensex surged by 358.89 points or 1.61%, to settle at 22702.34, while the CNX Nifty gained 101.15 points or 1.51% to settle at 6,796.20.

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