EQUITY OPENING BELL

 Markets likely to extend the rally mood with a positive start

The Indian markets took the lead of global rally and surged in the last session, coming out of the slumber of last more than a week. There was across the board buying with traders lapping stocks from high beta to defensive on attractive valuation.Today, the start is likely to be good on sanguine global cues and the markets may extend their gains. However, the volume is likely to remain low in view of the trade unions two-days nationwide strike. The unions have put forward a charter of 10 demands such as urgent steps to control price rise, strict enforcement of labour laws in all places of work, social security net for workers in the unorganised sector etc. After the Prime Minister, the Industry body Assocham too has urged central trade unions to call off the strike, saying that the economy would take a hit of Rs 15,000 crore to Rs 20,000 crore due to disruptions. There will be buzz in the money markets after they reopen from a break, as the government decided to cancel its last bond auction for 2012-13 in view of its improving cash position, bond yields are likely to move lower. There will be buzz in the power sector as the ministry once again discuss the standard bidding documents for case-II Ultra Mega Power Projects with industry players before taking the approval from the Empowered Group of Ministers. The aviation sector too will keep buzzing with the ongoing price war.
The re-energized US markets went for a rally on Tuesday after a long weekend, supported by some merger-and-acquisitions news and  gains in the European market after economic sentiment index for Germany rose in February.Traders even overlooked the report that homebuilders confidence unexpectedly fell in the month of February. The Asian markets have made mostly a positive start, though some of the indices are marginally in red too. Weaker yen has boosted the earnings outlook of Japanese exporters, taking the markets higher by about a percent.
Back home, stock markets in India showcased high degree of resilience on Tuesday as the benchmark equity indices finished an extremely volatile session on a sanguine note. The benchmark gauges showcased a strong performance by vehemently garnering close to a percentage point and the sharp rally looked even more prominent since it came on a day when equity indices across Asia largely exhibited mostly negative trends while European counterparts traded on a positive note, but failed to match the fervor with which the Indian bourses soared. The frontline indices, with the sharp upmove in late trade not only surpassed the psychological 5,900 (Nifty) and 19,500 (Sensex) levels but also regained most part of the ground lost in previous three weeks brutal sell-off. After getting off to a flat-to-negative opening, the markets traded in close proximity with the previous closing levels for most part of trade as cues from the Asian space remained sluggish. But, markets regained strength in last leg of trade and ended the session near intraday high supported by firm opening in European counterparts. Sentiments also got some support from continued buying in sugar stocks on news that Centre is likely to take a decision on giving freedom to the Rs 80,000 crore sugar industry to sell the sweetener in the open market in few days. Sugar stocks including Balrampur Chini, Triveni Engineering and Rana Sugar all edged higher in the trade. Meanwhile, government's decision to cancel its last bond auction for 2012-13 in view of its improving cash position also boosted the sentiments of the traders. On the global front, European counters traded firmly in the early trade and boosted the sentiments. Back home, gains of likely candidates for banking licences, IFCI, Mahindra and Mahindra Financial Services and Shriram Transport Finance Company, too bolstered the sentiment. NBFC rose a day after RBI Deputy Governor Anand Sinha said RBI would issue final guidelines on new bank licences before the end of March. Shares related to construction too remained on the buyers' radar on expectations that the government will provide thrust on infrastructure development in Union Budget 2013-14 to be tabled in the Parliament on February 28, 2013. On the flip side, Bharti Airtel and Idea Cellular edged lower on the bourses on Tuesday after the government cleared a proposal to allow 4G licence holders to also offer voice calling services, leading to more competition in the telecom sector. Finally, the BSE Sensex gained 134.64 points or 0.69% to settle at 19,635.72, while the S&P CNX Nifty rose by 41.50 points or 0.70% to end at 5,939.70.
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