Markets likely to open firm tracking Asian peers

IMD's monsoon forecast to aid sentiment. At 8:40am (IST), the SGX Nifty was trading at 8,197 levels, higher by 0.4% or 36 points.

Markets are likely to open firm on Friday tracking gains across Asian markets that gained ground as investors bet the US Federal Reserve (US Fed) will not raise interest rates too soon, though anxiety over how Greece's debt crisis will unfold dampens risk appetite.

At 8:40am (IST), the SGX Nifty was trading at 8,197 levels, higher by 0.4% or 36 points.

Japan's Nikkei share average rebounded from a one-month low on Friday as buyers took advantage of recent dips, but trade was cautious ahead of a Bank of Japan (BoJ) policy decision and its governor's comments after the meeting.

The Nikkei share average rose 0.7 percent to 20,131.95 points by mid-morning after dipping below the 20,000-mark for the first time since mid-May.

At the two-day meeting ending on Friday, the BOJ is expected to maintain its massive asset buying programme and pledge to increase base money at an annual pace of 80 trillion yen ($650 billion).

"The outlook is a positive start. The indices will look at building up on the gains in recent times. Nifty has regained control above its earlier support and this could propel the index closer to the next resistance zone of 8,400," points out a morning note from IIFL.

"Reliance Industries appears to be on the shopping list since the AGM with messages floating on potential revenues from the Jio services. Fundamentally, RIL continues to enjoy a healthy position as far as its core business is concerned. In fact, the stock has surpassed its 200-DMA for the first time since December 2014," it adds.

Monsoon forecast

Meanwhile, according to the Indian Metrological Department (IMD), monsoon is likely to remain strong through the month of June. As on June 18, the monsoon was 10% above normal, mainly on account of excess rains over central India, the south-eastern coast and parts of the Northeast, suggests a Times of India report.

“The news of below average monsoon, below expectation corporate earnings have been factored by the market. However, if the monsoon is worse-than-expected or recovery in corporate earnings is delayed, then the markets will correct once again, which we believe will be a great opportunity to invest,” said Nilesh Shah, managing director, Kotak Mahindra Asset Management in an interview to Business Standard. CLICK HERE FOR THE FULL INTERVIEW

Benchmark indices rose over 1% on Thursday to end higher for the fifth straight session, after the US Fed kept interest rate steady and also indicated that rate hikes would be gradual, eased concerns over slowdown in foreign fund inflows.

The stronger finish was also aided by index heavyweight Reliance Industries, which rose over 5.41% on the BSE. Progress in monsoons and favourable macroeconomic data also boosted traders’ sentiment.



With Reuters inputs