Markets to get a cautious start of F&O expiry session

The Indian markets showed some short covering in the final hours that took the indices higher for the day in the last session. Today, the start of F&O series expiry day is likely to be cautious; the heavy July series may witness some short covering going towards expiry. Traders are likely to get some solace with National Statistical Commission Chairman Pronob Sen’s statement that the country's growth can be as high as 6.5 percent in the current fiscal. He has also said that government’s economic growth projection of 5.4 percent to 5.9 percent stated in the Economic Survey is very modest. Meanwhile, Global rating agency Fitch has retained ‘BBB-’ sovereign ratings of the country with a “stable” outlook and said rating revision depends on the new government’s willingness to make difficult choices. There will be some buzz in the iron and steel stocks, as the Federation of Indian Mineral Industries (FIMI) expects India to become an importer of iron ore in the 2014-15 fiscal. There will be some action in oil & gas stocks too on reports that Ministry for Petroleum & Natural Gas is working on a new public-private-partnership (PPP) model for laying gas pipelines in the country and correct the lacunas in the existing system.

There will be lots of important result announcements too, to keep the markets buzzing. Aban Offshore, BASF India, Bharat Electronics, Castrol India, DLF, Fag Bearings, HDIL, ICICI Bank, Ipca Laboratories, JM Financial, Maruti Suzuki India , NTPC, Pantaloon Fashion & Retail, PVR, Religare Enterprises, Sterlite Technologies, SPARC, Syndicate Bank and Tech Mahindra will announce their numbers today.

The US markets giving up their early gains ended mixed in the last session, as traders digested upbeat GDP data as well as the Federal Reserve’s monetary policy announcement. US GDP increased by 4.0 percent in the second quarter following a revised 2.1 percent decrease in the first quarter. The Asian markets have made a mixed start with some of the indices in the region poised for third monthly gains on getting good economic data from the US and Fed’s statement that it continues to anticipate maintaining the current interest target range for a considerable time.

Back home, Wednesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around half a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 26,000 (Sensex) and 7,700 (Nifty) bastions. Earlier, markets made a somber start as sentiment took a hit for the worse post market heavyweight, L&T scrips cracked over 7% on lower than expected Q1 numbers. The biggest engineering and construction firm of the country reported more than double Net Profit for the June quarter, but profitability of core businesses like engineering, power, material handling and heavy engineering showed pressure on margins. However, sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Investors also turned optimistic after National Council of Applied Economic Research (NCAER) said that India’s GDP will expand at 5.2-5.7 percent this fiscal, with manufacturing sector showing signs of nascent recovery. Sentiments also remained up-beat after Indian Meteorological Department (IMD) said that the monsoon in the country is likely to remain strong till August 15. IMD has forecasted heavy rainfall in many parts of the country except northwest India in the next 48 hours. Positive cues from regional counters too supported the sentiments with most of the Asian markets ending in the green. Back home, rally in telecom stocks too aided sentiments. Stocks like Reliance Communication, Idea Cellular, Bharti Airtel all edged higher on report that foreign direct investment in the telecom sector grew to $1.5 billion in the first two-months of the 2014-15 fiscal. Stocks related to textile sector too remained on buyers’ radar, as an expert panel constituted by the government has submitted the draft of the new National Textiles Policy, which aims to achieve $ 300 billion exports by 2024-25. Finally, the BSE Sensex gained 96.19 points or 0.37%, to 26087.42, while the CNX Nifty surged by 42.70 points or 0.55%, to 7,791.40.