EQUITY OPENING BELL

Markets likely to get a cautious but positive start; NBFCs to be in action

The Indian markets remained in consolidation mood on Friday and traders opted to be on the sidelines. Today, the start of the crucial week is likely to be positive one, this week union budget will be presented, while the F&O series expiry too will take place on the same day. All eyes will be on the budget and lots of speculations getting unfolded from it. The key figure eyed in the budget would be fiscal deficit and divestment target for fiscal year 2013-14. Railways related stocks will be in action ahead of the Rail budget tomorrow. However, the real buzz is likely to be from the banking sector and the aspirants of new banking licences. Reserve Bank of India  has released final guidelines for issuing new bank licences paving the way for corporate houses to enter the banking sector.The most important thing is that RBI has not excluded companies or entities from any specific industry from applying for a new bank licence. Companies with a 10-year track record and "sound credentials" can apply by July 1. Foreign ownership will be capped at 49 percent for the first five years, and the lenders are required to set up one-in-four of their branches in villages with less than 10,000 people.

In other development, the government has exempted merger and takeover plans for loss-making and failing banks from the purview of fair trade regulator Competition Commission for a period of five years. The telecom stocks too are likely to be in action as the DoT has said that operators offering third-generation services on roaming will have to stop them immediately and should also pay a penalty of Rs 50 crore per service area for violating licence norms.

The US markets bounced back and ended higher on Friday, reducing their weekly losses on some supportive European cues. Most of the Asian markets have made a positive start, the Japanese market has taken the lead on speculation that the new Bank of Japan governor will go for aggressive monetary easing.

Back home, after witnessing biggest sell-off since July 2012 in the previous session, key Indian benchmarks ended the session on a flat-to-negative note on last trading day of the week as sentiments remained cautious ahead of the Union Budget and Economic Survey of India to be released in the coming week. Markets traded choppy in the first half as sentiments remained jittery after President Pranab Mukherjee, while addressing the joint sitting of the two Houses of Parliament, said that inflation is easing gradually, but is still a problem and expressed his hopes of recovery in economic growth. However, recovery witnessed in mid-noon trade proved short-lived as market participants booked all their gains at the end shrugging off firm cues from European counters. On the global front, European markets traded on a positive note after better-than-expected German business confidence data. Back home, selling in Aviation sector too dampened the sentiments as Jet Airways and Spicejet edged lower on concerns of increased competition after Malaysian budget carrier AirAsia recently announced the launch of its new airline in India in partnership with the Tata Group. Defensive sector FMCG also witnessed a sharp cut of around one and half a percent, while the metal stocks remained under pressure for the second consecutive day, losing another half a percent. However, the losses remain capped as investors kept themselves busy in piling up positions in software and technology counters on the back of Gartners' report that healthcare providers' spending on IT will increase by seven percent this year. Meanwhile, high beta realty bounced back, gaining over one and half a percent for the day, though the housing ministry looks determined to introduce the pending legislation in Parliament's budget session to set up a real estate watchdog, the private developers associations have disapproved the proposal saying that realty watchdog is only going to increase the number of clearances and checks, leading to further delay in housing projects. Finally, the BSE Sensex lost 8.35 points or 0.04% to settle at 19,317.01, while the CNX Nifty declined by 1.95 points or 0.03% to end at 5,850.30.