New series to get a cautious start; recovery can be expected in latter trade

The Indian markets suffered sharp selling in last session going for the F&O series expiry, though both the benchmarks snapped the series with gains of around 5%, the day was marked by across the board profit taking. Today the start is likely to remain flat and traders will be eyeing the GDP data for the last quarter, but the markets may consolidate after huge drubbing, taking cues from the good global cues. Meanwhile, supporting RBI’s fight against inflation, Parliamentary Affairs Minister M. Venkaiah Naidu has said that containing inflation is a priority for the newly formed government. Earlier, Finance Minister Arun Jaitley too had vowed to check inflation. There will be some buzz in banking license hopefuls once again, as it has been reported that the government wants regulators to issue more banking licenses to make the country's financial-services industry more competitive. Today the aviation stocks too may see some action, as civil aviation minister Ashok Gajapathi Raju has said that the government is open to the idea of privatising loss-making Air India.The PSU oil marketing companies are likely to gain on indication that the monthly diesel price hikes of 40-50 paise a litre are likely to continue.

There will be lots of result announcements too, to keep the markets buzzing. Aarti Inds, ABG Shipyard, Astrazeneca Pharma, Aurobindo Pharma, Bannari Amman, Bayer Crop, Berger Paints, Bhushan Steel, EIH, Future Retail, Gitanjali Gems etc will announce their numbers.   

The US markets ended mostly higher in last session despite getting mixed set of economic data, while there was bigger than expected drop in initial jobless claims, on the same time revised data from the Commerce Department showed that GDP fell by 1.0 percent in the first quarter compared to the initial estimate for a 0.1 percent uptick. The Asian markets made mostly a positive start, though some cautiousness emerged after a report that Japanese industrial production missed forecasts.

Back home, Thursday turned out to be disappointing session for the Indian equity indices which got pounded by around one and half percentage points on the expiry of May series Futures and Options. Indian barometer gauges, witnessed blood bath and closed near their lowest level in almost two weeks, breaching major crucial support levels 24,300 (Sensex) and 7,250 (Nifty) on feeble global cues. After a negative opening, the domestic bourses never looked in recovery mood and continued sliding till end, closing near the lowest point of the day. Selling was both brutal and wide-based as, barring healthcare; none of sectoral indices on BSE could manage a green close. Counters, which featured in the list of worst performers included software, technology and oil and gas. Sentiments also remained somber on report that foreign institutional investors (FIIs) sold shares worth a net Rs 286.54 crore on May 28, 2014, as per provisional data from the stock exchanges. Selling got intensified in last leg of trade as European markets made a sluggish start, while most of the Asian markets went home in red, with Japanese markets declining over a percentage point. Back home, investors remained on sidelines ahead of Q4 GDP data, scheduled to be released on Friday and RBI policy review next week, wherein Raghuram Rajan is likely to keep monetary policy rates steady, given continued concerns about inflation. Sentiments remained down-beat with software and technology counters bearing most of the brunt led by fall of around eight percent in Infosys stock after the company announced the resignation of its President and Member of the Board B. G. Srinivas. Sentiments also got dented after select stocks of non-banking finance companies (NBFC) viz. Reliance Capital, Manappuram Finance, Shriram Transport Finance Company, IDFC continued to trade lower on report that Reserve Bank of India (RBI) tightened merger rules for non-banking finance companies, requiring them to obtain the RBI’s written permission to acquire or merge with any similar entity. Finally, the BSE Sensex plunged by 321.94 points or 1.31%, to 24234.15, while the CNX Nifty declined by 94.00 points or 1.28%, to 7,235.65.