Taking off from the rise in US markets on Monday on the back of a resolution among US lawmakers on the ‘fiscal cliff’, the Indian markets rose by 154 points or 0.8 per cent to close the day at a 20-month high at 19,584.
This was also was the best opening for the markets to a calendar year over the last four years. It was back in 2009 when the markets opened on the first day of the year with big gains and closed the day with a gain of 2.7 per cent. Since then, the markets have gained less than 1 per cent in the new year.
While all major markets across Asia and Europe were closed for trading on Tuesday, experts said that the gains on Tuesday were a result of the last minute US Senate deal on the ‘fiscal cliff’.
“The possible resolution of the US ‘fiscal cliff’ issue kept sentiments positive. While the ‘fiscal cliff’ has been likely averted, the deal has only postponed the spending cuts by two months, while implementing higher taxes on incomes of individuals earning above a threshold,” said Dipen Shah, head of private client group research at Kotak Securities.
With 2013 starting on a positive note, there are expectations that the gains in 2012 are likely to go up further this year as the domestic fundamentals look much better.
“With most of the key fundamental variables looking much better than the year gone by and with the recent reform announcements by the government improving investment sentiment, we expect 2013 to be a good year for the Indian economy, corporate profits and equities,” said Sunil Singhania, head of equities at Reliance Capital Asset Management.
“Equity markets look at the future and we expect equities to outperform other asset classes in 2013.”
January itself may set the tone for the year as the result season for the third quarter of the financial year 2012-13 will kick start with Infosys results on January 11, 2013 and then there are expectations for a rate cut from the Reserve Bank of India this month.
Marker experts say that a rate cut