Gas Pricing To Light Up Markets

After long, there were healthy gains seen on the Indian markets. Supported by positive global cues, the Indian markets gained 1.7% yesterday. What also supported the upswing was the RBI’s surprise release of the current account deficit (CAD) data for January-March 2013.

India’s CAD moderated drastically to 3.6% of GDP as trade deficit narrowed. While exports increased by 5.9%, imports declined marginally by 1%. The positive data managed to reduce worries considerably. Moreover, the rupee gained some strength and ended the day at 60.19 to the dollar. All these factors led to a rather positive day for the markets.

So will the up-trend continue today as well? Are global and domestic cues conducive of resulting in gains?

The answer seems yes. Globally the sentiment was maintained at a positive. The US markets gained for the third straight session after positive macroeconomic data and reiterations from Federal Reserve officials that monetary policy depends on the economic outlook. European stocks too jumped up on upbeat US economic data.

Weekly jobless claims fell, personal spending and incomes rose and pending home sales jumped. This was reason enough to set a growth-oriented environment for the markets to operate in.

While global cues have been supportive, there has been a rush of developments domestically that is going to be taken well by the markets today. Among the developments were the following.

The Commerce Ministry held a meeting with foreign and domestic retailers to clarify norms regarding investing in the sector. The meeting ended on a positive note with the ministry being open to tweaking retail FDI norms to boost investment.

The Cabinet Committee for Economic Affairs (CCEA) approved the Rangarajan committee’s formula for gas pricing and has approved to raise the price of natural gas to USD 8.4 per mmbtu from April 01, 2014. This is likely to result in an EPS estimate boost for oil & gas companies. Moreover, it will also encourage investments in the sector and is likely to be taken positively by the markets. For more on this, click here.

Owing to an optimistic global sentiment and encouraging domestic developments, the Indian markets are likely to see healthy gains today. A very cheerful opening is on the cards.