Markets to get a somber start on penultimate day of F&O expiry

The Indian markets suffered sharp plunge in last session, with both the major averages witnessing triple digit cuts and losing their major crucial support levels. Today, the start of the penultimate session of the F&O September series is likely to be in red and the Nifty may retest the 8000 level in the very opening deals. Today, the power and coal stocks are likely to be in action, as the Supreme Court will decide the fate of 218 coal blocks, which was allocated to companies illegally by the Centre. However, there will be some cheer in the steel stocks on report that India’s steel production growth rate far outstripped the world's average in August clocking a 5.2 per cent jump in August at 7.02 million tonnes, mainly due to higher production by major producers. Also, the pharma companies are likely to get a boost with the Government ensuring that the National Pharmaceutical Pricing Authority (NPPA) no longer enjoys sweeping powers to control drug prices. The NPPA has been asked to withdraw the guidelines that allowed the Authority to control drug prices in public interest. There will be some buzz in the textile stocks as well, as the Union Minister of State for Textiles Santosh Gangwar will discuss the provisions of the proposed New Textile Policy with States in an annual conference of State textiles ministers.

The US markets continued their bearish run and ended lower once again in last session, the trade remained choppy amid geopolitical concerns that US expanded its military campaign against the Islamic State into Syria. The Asian markets have mostly made a soft start on heightened concerns about geopolitical tensions in the Middle East, combined with renewed concerns about European growth.

Back home, Indian barometer gauges witnessed bloodbath with both the major indices losing over one and a half percentage points and ending below their crucial 8,050 (Nifty) and 26,800 (Sensex) levels amid feeble global cues. Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include realty, oil and gas, capital goods and public sector undertaking. After trading in tight band for most part of the day’s trade, domestic gauges crashed like house of card in the last leg of trade as investors offloaded their positions ahead of F&O contract expiry on Thursday. Sentiments remained dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 186.41 crore on September 22, 2014. Sentiments also remained down-beat after global rating agency Moody’s Investors Service said that India’s state-run banks barely manage to meet the minimum capital requirements and the major 11 banks need between Rs 1.5 lakh crore to Rs 2.2 lakh crore, or $26-$37 billion by 2019 to comply with the so-called Basel-III norms and the government will find it difficult to raise capital quickly in the current environment due to low bank valuations. Selling got intensified as European markets made an awful start, while the Asian markets shut shop mostly in the red. Back home, depreciation in Indian rupee against dollar too dampened the sentiments. Slump in realty counter too played spoil sport for the Indian equity markets. Losses in realty space were mainly led by shares of DLF which plunged downgrade. Meanwhile, The Delhi government hiked circle rates by up to 20 percent with an aim to check black money component in sale and purchase transactions. Oil & Gas stocks too witnessed nasty drubbing after reports suggested that complete clarity on the pricing issue for domestically produced gas is expected to emerge by end of September. Finally, the BSE Sensex plunged by 431.05 points or 1.58%, to 26775.69, while the CNX Nifty dropped by 128.75 points or 1.58% to 8,017.55.