Markets to make a cautious start of the F&O expiry week

The Indian markets adding up modest gains scaled new high in last session on some positive comments by the RBI governor. Today, the start of the crucial F&O expiry week is likely to be cautious and there will be some weakness in early trade, tailing somberness in other regional markets on global worries. On the domestic front traders will be reacting to the latest RBI data that foreign direct investment inflows into India have fallen sharply from $23.47 billion in 2011-12 to $18.29 billion in 2012-13 and further to $16.05 billion in 2013-14. However, there will be some support from Finance Minister Arun Jaitley’s statement, who has said that there would be huge opportunities for the corporate sector to invest once the country reached the take-off stage of economic advancement. Today, oil & gas sector stocks will keep buzzing, as a four-member committee of secretaries (CoS) set up by the government to review the gas-pricing formula will hold its first meeting with stakeholders. There will be some action in power stocks as the government has started the process for setting up four new ultra mega power projects in Bihar, Jharkhand and Odisha, which will together add 16,000 MW capacity to the country's power generation.

The US markets made a mixed closing in last session; however geo-political worries related to Ukraine-Russia kept lingering, with NATO expressing alarm at a buildup of Russian troops on the border with Ukraine. The Asian markets have made mostly a lower start considering Fed Chair Janet Yellen comments less dovish than expected and on renewed tensions from Ukraine.

Scaling new all time closing high, Indian equity benchmarks ended the Friday’s session in the green amid upbeat US data and positive annual report from Reserve Bank of India (RBI). Sentiments remained up-beat with the Reserve Bank of India (RBI) stating that the Indian economic growth is poised for a take-off amid signs of economic reforms, fiscal consolidation and projected improvement in investments. The central bank has forecasted the gross domestic product (GDP) to grow around 5.5% in 2014-15 after two painful years of sub-5% growth. Besides, statements from Finance Secretary, Arvind Mayaram, of linking diesel prices to markets and government soon doing away with diesel subsidy, also buoyed the sentiment of Indian equity markets. However, gains remained capped on report that the southwest monsoon is continuing its weak run. For the week ended Thursday, it was 25 per cent below normal. On the global front, European markets made a negative start, however, Asian counters ended mostly higher. Back home, some support came on report that foreign direct investment (FDI) in India increased by 34 percent to $1.92 billion in the month of June 2014 as compared to $1.44 billion in the same month of previous year. During the first quarter of FY15, FDI jumped by 34 percent to $7.23 billion from $5.39 billion recorded in the corresponding period of the previous fiscal. Rally in software and technology too aided the sentiments, cheered by strong US economic data, which showed that home re-sales rose to a 10-month high in July, factory activity in the mid-Atlantic region hit its highest level since March 2011 in August, and a gauge of future economic activity grew solidly last month. PSU bank’s stocks too remained on buyers’ radar for second day in a row, after finance minister Arun Jaitley underscored that government was taking steps to professionalize the management of PSU banks and help them strengthen their risk management system. Finally, the BSE Sensex gained 59.44 points or 0.23%, to 26419.55, while the CNX Nifty added 22.10 points or 0.28% to 7,913.20.