First trading day of 2011 likely to get a positive start

The Indian equity markets made a good closing on the last trading day of the year and both the benchmark indices were up by more than half a percent point. The markets are likely to continue their momentum in new year with a positive start today, the robust economic growth and record inflows from foreign institutional investors have provided big support to the Indian stock markets during the calendar year 2010 and the same is likely to continue in 2011 as the IMF has said that developed countries will grow slowly while emerging-market economies will power ahead. Today auto companies will remain in lime light with announcement of their sales number for December. Tata Motors has announced 31% rise in its total vehicle sales, with Nano sales too picking up. Steel companies too are likely to hog the limelight today as the steel prices are set to go up by about 5% later this week due to higher raw material prices. This is likely to increase the price of cars and consumer goods which are among the largest users of steel and all the major companies are likely to go for a price hike in a range of Rs 1,000-1,500 per tonne. Meanwhile the markets may get some confidence with Finance Minister Pranab Mukherjee statement that Centre is hopeful that food inflation will come down to 6.5% by March.

The US markets closed flat with negative bias on the last trading day of the year, the volume remained low and the traders in the holiday mood. The Asian markets have made a positive start though key markets like China and Japan are still closed for the New Year holiday.

Back home, local stocks markets bid adieu to the year 2010 on a high note as they ended the day on an optimistic note with smart gains of over half a percent. The benchmark indices managed to extend their gains for the third straight day as they continued to garner strength through the day's trade despite gyrating in a narrow range. Investors showed huge buying interests across the counters with Anil Dhirubhai Ambani Group (ADAG), realty, auto stocks leading from the front. Market heavyweights like Reliance Industries too lent its support to the frontline indices. The fifty stock nifty eventually came off intraday highs as traders took some profits off the table and closed just15 points below 6150-mark. The BSE Sensex on the other hand amassed well over triple digit gains to scale beyond the psychological 20,500 mark. Earlier in the day, the markets got off to a positive start despite the mixed cues from the global peers. Investors remained cautious in early trade but sentiments improved as the day progressed. The bourse moved in a narrow range with a positive bias and managed to touch their intraday highs in the initial moments of the second half. However, some bouts of profit booking by investors thereafter lead the indices to close off their day's high. Volumes in the local markets remained on lower side to over Rs 78 thousand crore while the turnover for NSE F&O segment too remained on the lower side. Meanwhile, in a press conference the oil secretary S Sundareshan said that oil and finance ministries have been in consultations over the issue of under-recoveries and in no case the financial health of the oil companies will be allowed to be affected. He also cleared that compensation will be provided to OMCs in line with the subsidy sharing formula. The finance ministry which had earlier refused to bear more than 33% of the under-recoveries is now likely to let its share hike. From the front liners, RCom, Bajaj Auto, Reliance Infra, JP Associates were the top gainers while, Sterlite Industries, Jindal Steel, NTPC and BHEL were the top losers. Finally, the BSE Sensex advanced 120.02 points or 0.59% to settle at 20,509.09 while the S&P CNX Nifty added 32.65 points or 0.54% to end at 6134.50. 

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