Sensex up but will Winter Session be a dampener for mkts?

With the Winter Session of the Parliament beginning today, markets are clearly waiting for cues on reforms from the government. Opposition may unite in its offensive as FDI in multi-brand retail will dominate the proceedings initially. Many policy actions would require legislative sanctions.

“The winter session would be a crucial test for the government to not just resolve issues but also to prove its political acumen,” says an IIFL report.

The Indian markets opened positive today, with the Sensex up 60 points in opening trade at 18,521.65 and the 50-share NSE Nifty went up 14.75 points to 5,629.55.

Most brokerages expect the Winter Session to be a dampener for markets since not many bills are expected to be passed.

According to Credit Suisse not too many bills are likey to be passed because " Corruption allegations vitiated politics." Nomura on the other hand expects Companies Bill, Competition Bill, Banking Law and Forwards Contract Bill to sail through smoothly, but Insurance, Pension and Land bills may face much more opposition.

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“A no-confidence motion may or may not be raised, but don’t see the government at risk. Even a discussion about FDI in multi-brand retail will lead to heated debates and could disrupt parliamentary proceedings,” it said.

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Rafael Nam, in a Reuters blog, has pointed out that despite calibrations about the economy, interest rates, and the government’s ability to respond to these challenges, there has been a h clear downward trend in trading volumes since the start of the year

“That comes even as foreign institutional investors (FIIs) have bought a net $18.7 billion in Indian stocks this year, showing it has not been near enough to offset what appears to be the reduced risk appetite of domestic investors.

Retail investors are exiting stock markets in droves, driving redemptions to a two-year high in September, which may help explain why domestic institutions turned net sellers in the July-September quarter, according to Morgan Stanley data,” he said today.

Wipro, Coal India, L&T, HDFC,ICICI Bank, HDFC Bank, Hero MotoCorp,Maruti, Bajaj Auto,BHEL, Tata Steel,Jindal Steel,SBI,Dr Reddys Lab,NTPC, are among gainers in Sensex and Nifty.

RIL, Infosys, Tata Power,Sun Pharma,Bharti Airtel,ONGC are among losers in Sensex and Nifty.

There should be some action in the PSU sector as the government will kick start its ambitious disinvestment programme on Friday with a 4% stake sale in Hindustan Copper.

The government has also allowed India’s largest insurer Life Insurance Corporation (LIC) to invest up to 30% in a company as against the earlier limit of 10 percent.

The telecom stocks too may be reacting to the statement of Planning Commission Deputy Chairman Montek Singh Ahluwalia, who has said that it was a mistake to set a high reserve price of the 2G spectrum auction.The Government had set the reserve price at Rs 14,000 crore for 5 Mhz of pan-India spectrum.