Another Positive Day For The Markets?

The last few days have been positive for the Indian markets. We have seen momentum coming in from sectors like auto, banking and infrastructure. This movement has been largely indicative of improved sentiment on the macroeconomic front and/or hopes of a rate cut in the RBI monetary policy review meeting scheduled on May 3, 2013. The markets have also been helped by a better-than-before gold and oil price equation. Significantly lower prices have eased some pressure off the current account deficit. Coupled with lower inflation numbers, the markets have been largely glad about the way things are functioning. Yesterday the Sensex gained 1.19% to end the day higher by 227.47 points at 19406.85 while the Nifty gained 1.36% to close higher by 79.40 points at 5916.30. Will today see healthy gains as well?

Globally, the mood has been positive and hence supportive of upward movement on the Indian markets. US stocks have been on the rise because of data from the Labor Department. According to the data initial jobless claims fell by 16000 to 339000. Moreover, earnings in the US have been better than expectations and have been pushing the markets higher. The Dow, Nasdaw and S&P closed the day higher by 0.17%, 0.62% and 0.39% respectively.

Europe too was positive. This was mainly because of better than expected economic data from the UK. The Office for National Statistics showed the economy expanded by 0.3% in the first quarter of 2013, exceeding expectations of 0.1% growth. It also avoided the British economy from getting pushed into recession for the third time in five years. With this, the FTSE and DAX gained 0.17% and 0.95% respectively yesterday.

The opening on Asian markets, in line with global sentiment, has been good. Asia Dow, Nikkei 225, Hang Seng, Shanghai and Singapore are trading higher by 0.47%, 0.12%, 1.03%, 0.03% and 0.37% respectively.

Yes, domestic cues have improved significantly during the last few days. Macroeconomic trends are being seen as prospectively better and rate cuts are considered likely next week. Moreover, the global sentiment has been positive, thus supporting possible upward movement. Overall, cues seem to indicate a positive day ahead. However, some trimming can be expected as a result of profit-booking.

We are also in the middle of the results season and a lot of stock-specific action can be expected. The companies to announce their quarterly numbers today include Castrol, Cholamandalam Investment & Finance, Digjam, Goodyear, Hero MotoCorp, Indiabulls Infrastructure and Power, Indiabulls Power, ICICI Bank, Styrolution ABS, Kirloskar Oil Engines, LIC Housing Finance, Maruti Suzuki, Mastek, Raymond, Siemens, State Bank of Travancore, Sterlite Technologies and Vijaya Bank. These stocks are expected to remain volatile through the day.