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Domestic Market View

Markets likely to extend the rally on global optimism

The Indian markets managed a close of gain in last session despite a weak start and after trading in red for most part of the day. Though, the trade remained choppy but the indices extended their rally in the new month. Today, the further extension is expected in the last session’s rally as the global cues are good. There will be buzz in the auto stocks as the car sales in the country accelerated for the third straight month in January, indicating that sales in the next fiscal year could be robust. The telecom stocks too will be in action as the issues related to the 2G case, including Home Minister P. Chidambaram’s alleged role in the scam, are expected to be decided by the Supreme Court. The judges are also likely to deliver judgment on a plea by the Centre for Public Interest Litigation (CPIL) seeking the cancellation of 122 licences granted in 2008 to nine telecom companies. Further the PSU stocks too will be buzzing as an EGoM on disinvestment will be meeting today. Meanwhile, RBI Governor Duvvuri Subbarao has said that the amount of public debt a country can accumulate needs to be capped as a proportion of its gross domestic product for economic stability.

Apart from this there will be lots of important result announcements. Andhra Bank, Chennai Petro, Corporation Bank, Escorts, Gillette India, Hexaware Tech, Piramal Health, Marico, RCF, Procter & Gamble and Thermax are among the many to announce their numbers today.

Domestic Market Overview.

Indian markets riding on sanguine global cues stage smart intraday turnaround

Boisterous Indian equity markets managed to elegantly overcome early blues and staged an exciting bounce back from the lowest levels in Wednesday’s session, taking the benchmark indices beyond crucial technical levels. The frontline indices surged over one and half a percentage points from intraday lows to settle around the psychological 17,300 (Sensex) and 5,250 (Nifty) levels. After commencing the session on a sluggish note and trading below the neutral line for most part of the day, the stock indices rebounded in the second half following the encouraging leads from European markets.

The encouraging monthly sales numbers by auto majors like Tata Motors, Mahindra & Mahindra, TVS Motors and Maruti Suzuki, kept the rate sensitive automobile counter buzzing. Meanwhile, the overwhelming manufacturing PMI numbers which showed Indian manufacturing sector business conditions improved at fastest rate in eight months. The encouraging manufacturing sector data helped the Metal and Capital Goods counters gain additional traction which were instrumental in turning around the momentum of the benchmarks. Moreover, marketmen overlooked India’s foreign trade numbers which showed that trade deficit widened in December to $12.7 billion from $8.0 billion a year earlier as export growth slowed due to falling global demand.

Global Market Overview

Encouraging Chinese manufacturing data pulls Asian stocks higher

Most of the Asian equity indices were modestly higher on Wednesday as encouraging Chinese manufacturing data tempered concerns over downbeat US economic reports, while earnings disappointments in Japan capped stocks there. Meanwhile, Taiwan stocks ended 0.43 percent higher, lifted by HTC Corp and defensive plays such as transportation and biotech. While, the Nikkei average held on to recent gains, edging up for the second session and brushing off worse-than-expected earnings from blue chips.

However, Hong Kong shares declined, dragged by weak Chinese banks after new loan growth in January cited in mainland media lagged figures reported earlier. China shares closed down 1.1 percent on Wednesday, led by large-cap shares, with investor sentiment weak. 

US market rally on encouraging economic data

The US markets rallied on Wednesday, breaking a four-session losing streak for the Dow Jones Industrial Average and S&P 500, lifted by Chinese and European data and an expansion in US manufacturing. The Institute for Supply Management, showed business at US manufacturers expanded in January at the fastest pace in eight months. Separately, the Commerce Department reported builders increased spending for a fifth straight month in December, with construction expenditures up 1.5%. Ahead of the market opening, Automatic Data Processing Inc. released private-sector payrolls data showing US employers added 170,000 jobs last month. The data comes ahead of Friday’s monthly nonfarm payrolls report from the Labor Department.

However, the Congressional Budget Office projected that the 2012 federal budget deficit will be about $1.1 trillion, and that the economy will continue its sluggish recovery, with unemployment remaining above 8% both this year and next. The projected deficit represents 7% of US GDP that is nearly 2 percentage points below the deficit recorded in 2011 but still higher than any annual deficit between 1947 and 2008. Investor optimism also came with talk that Greece is going to work out a deal as far as their debt is concerned. Besides, Germany and Portugal completed bond auctions at lower yields.

The Dow Jones Industrial Average closed higher by 83.55 points, or 0.66 percent, at 12,716.50. The S&P 500 was up by 11.68 points, or 0.89 percent, at 1,324.09, while the Nasdaq closed up 34.43 points, or 1.22 percent, at 2,848.27