Markets to get a cautious but green start of the F&O expiry week

The Indian markets slipped further in last session amid brewing Iraq crisis. Today, the start of the F&O expiry week is likely to remain cautious but modestly green start can be expected taking cues from regional counterparts, though movement in crude oil prices linked to the Iraq unrest and the progress of monsoon will set the tone this week. Meanwhile, ISIS rebels captured three more towns in the western Iraqi province of Anbar on Sunday. The gains put the militants within easy reach of Jordan and Saudi Arabia, making the situation more vulnerable. However, traders will be getting some respite with a report that overseas investors have poured in more than $5 billion into Indian markets so far this month - taking the overall net inflows since beginning of 2014 to over $20 billion. There is one more incentive to them, as it has been reported that the government is likely to defer implementation of the controversial GAAR provisions by one more year to April 2017 and exempt transactions made up to March 2013 in a bid to improve business sentiment. Also, India's Finance Secretary Arvind Mayaram at G-20 meeting in Australia has said that policies of the new government will deepen the reform process to put the economy on sustainable and balanced high growth path. There will be some buzz in the railways, steel and cement stocks after the announcement of steep hike in rail fares and freight charges during the weekend.

The US markets continued their upmove in last session, though there wasn’t any major cue but traders hoped borrowing costs to remain low for some time to come and led the markets move higher. The Asian markets have made a green start overlooking the geopolitical risks in Iraq and Ukraine and took support from the report that Chinese manufacturing beat estimates in June.

Back home, extending their southward journey for third straight day, Indian equity benchmarks ended the volatile day of trade in red on Friday. The key gauges, lacking any significant upside triggers, displayed lackluster performance through the day. However, the psychological 7,500 (Nifty) and 25,100 (Sensex) levels proved as strong supports as the key gauges managed to settle above those levels by the end. Sentiments remained down-beat with United States announcing to send upto 300 military advisers to help Iraq fight insurgents of the Islamic State of Iraq and the Levant (ISIS). The United States will also lead a diplomatic effort to work with countries in the region to bring stability to Iraq. Sentiments also remained dampened as investors remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 420.51 crore on June 19, 2014, as per provisional data from the stock exchanges. Also, a weather office data has showed that rainfall was 45 per cent below average for the week ended June 18, compared with 48 percent below average the previous week. Though, the monsoon has covered half of India’s landmass four days behind the usual schedule. However, losses remained capped as some comfort came in with Petroleum Minister Dharmendra Pradhan’s statement that fuel supplies will not be impacted by the conflict in Iraq, nation’s second largest crude oil supplier. On the global front, European markets made a positive opening, however Asian markets ended mostly in the red. Back home, Oil & Gas counter edged lower ahead of Oil Minister Dharmendra Pradhan's meeting with Prime Minister, Narendra Modi on gas pricing issue. On the flip side, shares of gems and jewellery companies viz. Rajesh Exports, Gitanjali Gems, Tara Jewels, C Mahendra Exports, Shrenuj & Co, Tribuhovandas Bhimji Zaveri (TBZ) and Shree Ganesh Jewellery House edged higher after the Gems and Jewellery Export Promotion Council (GJEPC) statement that gems and jewellery exports is likely to rise to $44 billion during this financial year if there are positive policy changes. Finally, the BSE Sensex plunged by 96.29 points or 0.38%, to 25105.51, while the CNX Nifty declined by 29.25 points or 0.39%, to 7,511.45.