The Indian markets consolidated in last session and the benchmarks despite a good start suffered profit booking towards the end. Today, the penultimate day of the F&O series expiry is likely to have a positive start, tailing good global cues, however trade may show some volatility in latter half. The rate sensitives’ are likely to remain under pressure as the RBI Governor Raghuram Rajan has said that fighting rising prices will continue to be its priority and a call on raising interest rates will be taken after factoring in more data. However, he said that the Reserve Bank will wait for next set of data on inflation and industrial growth before taking a call on interest rates. Meanwhile, the Commerce and Industry Minister Anand Sharma has said that India will achieve the modest export target of $325 billion for the current fiscal but to enhance it substantially, the country needs to boost its manufacturing capability. There will be buzz in the markets especially in Vedanta Group companies, as the CBI has registered a preliminary enquiry against Vedanta Group chairman Anil Agarwal and unknown officials in connection with alleged irregularities in the disinvestment of Hindustan Zinc.
The US markets continued their upmove in the new week taking the Dow and the S&P 500 to new record highs, backed by continued optimism about the outlook for the US economy following IMF’s positive comments. Most of the Asian markets have made a positive start with Japanese Nikkei taking the lead topping 16,000 intraday for the first time since 2007, as data showed better US economic growth.
Back home, Paring most of their initial gains, Indian equity benchmarks ended the session on a flat note on Monday. Sentiments remained up-beat in morning on report that indirect-tax collections grew by 5% in the April-November period of this fiscal, crossing Rs 3 lakh crore mark. But, investors opted to book profit at higher levels in late trade, being the holiday truncated F&O expiry week, though markets managed to end in the green, extending their northward journey for second straight day. Supportive cues from US markets supported the local markets as sentiments remained up-beat their after latest data showed that final reading of third quarter GDP pointed to growth of 4.1%, which was the strongest reading since the economy expanded by 4.9% in the fourth quarter of 2011, and well above the 2.5% gain reported in the second quarter. Moreover, firm opening in European markets too supported the sentiments. Asian markets too ended mostly in the green terrain. Back home, some support also came in from currency front after Indian rupee appreciated on account of dovish comments made by Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan, who underscored that he expects a fall in vegetable prices to likely ease the headline inflation and retail inflation to 6.5 percent and 9.20 percent respectively in December. Rally in public sector oil marketing companies (OMCs) too supported the sentiments. Stocks related to power sector too remained on buyers’ radar as the government is working on a proposal where separate entities would handle electricity supply and distribution. The banking stocks too were in action, as the finance ministry has directed state-run banks to recover at least 10% of loans that have gone bad, by the end of this financial year. On the flip side, shares of major tyre companies, MRF, Ceat, Apollo Tyres, JK Tyre Industries, slowed down on profit-booking after reports suggested that the government has hiked customs duty on imported rubber. According to media reports, the customs duty will now be at 20% or Rs 30 per kg, whichever is lower as against Rs 20/kg or 20% whichever is lower, earlier. Finally, the BSE Sensex gained 21.31points or 0.10%, to settle at 21101.03, while the CNX Nifty added 10.25 points or 0.16% to settle at 6,284.50.
