Markets to make a positive start of the big week

The Indian markets resumed their northbound journey in last session with broad based buying taking the markets higher. Today is the big day for markets as well as for the nation, as the new government will be swearing in and traders will be eyeing for important portfolio announcements which may take place today. Meanwhile, the office of Prime Minister-designate Narendra Modi before he takes over as India’s 15th prime minister, indicated a smaller size of the next government and clubbing of ministries for smarter governance. Traders are likely to get some support with a FICCI survey, which has said that 93 percent out of the 76 CEOs covered by it, project a substantial improvement in the near-term economic situation with the Narendra Modi-led new government taking charge at the Centre. On the same time an Assocham study has indicated that riding on huge expectations from the incoming Modi government, foreign investment inflows are estimated to more than double to $60 billion level this fiscal. There will be some buzz in the iron and mining companies, as Goa Government has said that it will adopt a transparent mechanism to award mining leases in future and was studying the Supreme Court order lifting ban on iron ore extraction before taking a decision on vacating current mine operators through a transparent mining policy which is likely to take shape by next month. There will be lots of important result announcements too, to keep the markets in action. Andhra Cements, Britannia Inds, Canara Bank, City Union Bank, Educomp Sol, Everonn, India Cements, Jay Shree Tea, Muthoot Finance, Praj Inds, REC and Wockhardt are among many to announce their numbers. The US markets continued their bull run buoyed by good data of new home sales. The Asian markets have mostly made a positive start with some of the indices touching a six-month high, after an increase in US home purchases. Japanese market has taken the lead with yen holding its three days gains. Back home, Extending their previous session’s jubilation, Indian equity benchmarks ended the Friday’s trade near their intraday high levels with a gain of over a percentage point. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Though, some profit booking was witnessed during the trade amid report that foreign institutional investors (FIIs) sold shares worth a net Rs 294.99 crore on May 22, 2014, as per provisional data from the stock exchanges. But, domestic bourses maintained the steady trend on hopes that a Modi-led disposition would mark a paradigm shift in governance and herald a new era in economic reforms. Meanwhile, industry body Assocham in its action plan for the new government has pitched for liberalisation of ECB norms, GST implementation, incentives for investments and easing of processes for companies planning to set up manufacturing units. Supportive cues from US markets too provided support to local markets and Asian markets too ended mostly in the green. Back home, markets changed gear in last leg of trade to end near intraday high after State Bank of India (SBI) moved higher by nearly 10%, its highest level since May 2011, on reporting a better-than-expected net profit of Rs 3,041 for the quarter ended March 31, 2014 (Q4FY14). Other PSU banks like Canara Bank, Andhra Bank, Syndicate Bank, Oriental Bank of Commerce, Allahabad Bank, IDBI Bank and Indian Overseas Bank too edged higher. Meanwhile, stocks related to power sector too remained on buyers’ radar on the buzz that the incoming government will have a major thrust on the area, while infra and realty stocks witnessed buying on hopes of some recovery of the economy coming out of stagflation type of situation. Additionally, select gold related stocks continued their bull run for second day in a row after RBI permitted exporters, long-term export advance up to a maximum period of 10 years on a satisfactory track record and eased gold import norms. Finally, the BSE Sensex soared by 318.95 points or 1.31%, to 24693.35, while the CNX Nifty surged by 90.70 points or 1.25%, to 7,367.10.